The other information to the extended consolidated report of Enea SA for Q Poznań, date of approval: 21 November 2017

Transcription

1 The other information to the extended consolidated report of Enea SA for Q Poznań, date of approval: 21 November 2017 Date of publication: 23 November 2017

2 1. Operating Summary

3 ENEA GROUP IN NUMBERS RESOURCES 5.2 GW installed electric power 413 mln tonnes potential of 3 licensed areas thou. km of distribution lines including connections 15.7 thou. Employees 2.5 mln Customers FINANCE Q1-Q PLN mln net sales revenue PLN 1,947 mln EBITDA PLN 838 mln net profit PLN mln CAPEX GOALS UNTIL mln tonnes own demand for bituminous coal GW installed conventional electrical power 20.1 TWh electricity sales 38% EBITDA growth vs 2015 PLN 26.4 bln basic investment budget Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 3

4 OPERATING SUMMARY 1. Operating Summary 2-9 Selected financial data 5 Key operating figures and ratios 6 Comment of the Management Board 7 Key events in Q1-Q Enea Group's organisation and operations In Q1-Q Enea Capital Group generated: PLN 8,398 mln net sales revenue - growth by 1.1% yoy PLN 1,947 mln EBITDA - growth by 6.5% yoy PLN 838 mln net profit - growth by 16.3% yoy In the reporting period, the highest EBITDA, PLN 798 mln, was realised in the area of Distribution. The greatest growth in EBITDA, totalling PLN 144 mln (growth by 31.1% yoy), was generated in the area of Generation, which in Q1-Q closed with EBITDA amounting to PLN 610 mln. The basic driver for EBITDA change in this area was a growth in the generation capacity resulting from the acquisition of Enea Elektrownia Połaniec. The EBITDA result of the area of Trade, after a growth by PLN 13.3 mln (11.3% yoy), reached the level of PLN 131 mln, and the area of Generation in that period reported EBITDA amounting to PLN 451 mln (growth by 3.2% yoy). Group's structure Areas of operations Development strategy Higher volumes of sold electricity Higher volumes of sold heat energy Lower costs of purchasing electricity Higher sales of distribution services Higher costs of transmission services Higher fixed costs in the RES area Activities and investments under implementation Concluded agreements Market environment Financial position Shares and shareholding Authorities Other information Attachments Glossary of terms A detailed index of issues included in this document is to be found on page 81 In Q alone the Group generated: PLN 2,831 mln net sales revenue PLN 589 mln EBITDA PLN 214 mln net profit In Q1-Q Enea CG spent PLN 3,123 mln on investments, of which PLN 1,610 mln was consumed by equity holdings, PLN 625 mln by investments in the area of Generation, PLN 593 mln in the area of Distribution, and PLN 254 mln in the area of Mining. Net debt/ebitda as at the end of September 2017 was on a safe level of 2.1. In the period from January to September 2017 production and sales of commercial coal were comparable to the level of the previous year and amounted to 6.7 mln tonnes. The Group generated 15,178 GWh electricity (growth by 49.3% yoy), of which 13,834 GWh (growth by 41.6% yoy) derived from conventional sources. Sales of distribution services to end users amounted to 14,322 GWh i.e. increased by 2.9% in relation to the same period of the previous year. In the period of the first 9 months of 2017 Enea SA considerably increased the sales volumes of electricity to retail users by 942 GWh, which is 7.6% yoy. Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 4

5 SELECTED CONSOLIDATED FINANCIAL DATA [PLN 000] Q1-Q Q1-Q Change Change % Net sales revenue % Operating profit / (loss) % Profit / (loss) before tax % Net profit / (loss) for the reporting period % EBITDA % Net cash flows from: operating activities % investing activities % financing activities Balance of cash % Net profit of shareholders of the parent company Weighted average number of shares [pcs.] % Net profit per share [PLN] % Diluted profit per share [PLN] % [PLN 000] 31 December September 2017 Change Change % Total assets % Total liabilities % Non-current liabilities % Current liabilities % Equity % Share capital Book value per share [PLN] % Diluted book value per share [PLN] PLN thou % [PLN 000] Q Q Change Change % Net sales revenue % Operating profit / (loss) % Profit / (loss) before tax % Net profit / (loss) for the reporting period % EBITDA % Net profit of shareholders of the parent company Weighted average number of shares [pcs.] % Net profit per share [PLN] % Diluted profit per share [PLN] % EBITDA Net profit Q1-Q Q1-Q Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 5

6 KEY OPERATING FIGURES AND RATIOS unit Q1-Q Q1-Q Change Change % Q Q Change Change % Net sales revenue PLN ' % % EBITDA PLN ' % , % EBIT PLN ' % % Net profit PLN ' % , % Net profit of shareholders of the parent company PLN thou % % Net cash flows from operating activities PLN ' % % CAPEX PLN ' % % Net debt / EBITDA 1) % % Return on assets (ROA) 1) % 4.1% 4.3% 0.2 p.p % 3.3% -0.9 p.p. - Return on equity (ROE) 1) % 7.5% 8.2% 0.7 p.p % 6.3% -1.5 p.p. - Trade Sales of electricity and gas to end customers GWh % % Number of consumers (Power Delivery Points) thou % % Distribution Sales of distribution services to end users GWh % % Number of customers (closing balance) thou % % Generation Total generation of electricity, including: GWh % , % from conventional sources GWh % % from renewable sources of energy GWh % % Gross generation of heat TJ % % Sale of electricity, including: GWh % % from conventional sources GWh % % from renewable sources of energy GWh % % from purchases GWh Sales of heat TJ % % Mining Net production thou. of t % % Sale of coal thou. of t % % Closing stocks thou. of t % % Roadway works km % % Q1-Q3 2017/Q1-Q3 2016: EBITDA higher by PLN 119 mln Growth in sales of electricity and gas to end users by 743 GWh Greater volumes of generated electricity by 5,012 GWh Q3 2017/Q3 2016: Growth in sales of electricity and gas to end users by 240 GWh Greater volumes of generated electricity by 2,482 GWh Q1-Q3 2017: growth in EBITDA by 6.5% (by PLN 119 mln) consistent development of Enea CG: CAPEX on the level of PLN 3,123 mln with a safe level of net debt/ebitda ratio higher sales of electricity and gas to end users by 5.6% (by 743 GWh) greater total generationof electricity by 5.0 TWh Q3 2017: drop in EBITDA by 5.3% (by PLN 33 mln) consistent development of Enea CG: CAPEX on the level of PLN 678 mln with a safe level of net debt/ebitda ratio higher sales of electricity and gas to end users by 5.6% (by 240 GWh) greater total generationof electricity by 2.5 TWh 1) Ratio definitions are to be found on page 78 Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 6

7 COMMENT OF THE MANAGEMENT BOARD WE ARE IMPLEMENTING OUR STRATEGIC PLANS BASED ON A STABLE FINANCIAL AND OPERATING SITUATION OF THE GROUP Dear Sirs and Madams, Enea is developing in a balanced way, according to the Development Strategy until 2030 published last year. We have built solid foundations and now, by implementing synergies and optimising each link in our value chain, we consistently increase the Group's financial potential for further developmentand market strength. We are constantly analysing our strategy in the context of the current market situation and the signals coming from the Company's close and farther environment. The key issues for our business are related to the power market, shape of the European energy market in the context of the so-called winter package or detailed solutions for the European carbon dioxide trading system. We act flexibly and we do not exclude that if at some stage we find that new regulations can significantly influence the implementation of our strategic plans, we will proceed with their possible modifications. At present, however, we do not see such a need, and our operating and financial results confirm our beliefthat we are moving in the right direction, ensuringthe value of our Group for Shareholders. We are enhancing the attractiveness of the offering and increasing sales A vice-leader in the electricity generation market is obliged to maintain and increase the efficiency in the energy trading segment. Our strategic goal is further enhancement of operational efficiency on selling activity and proper balancing within the Group, which is to increase the sales of electricity to 2025 to end customers, with own generation oscillating around 24 TWh. We aim to achieve this goal by focusing on providing Customers with tailored and diverse offers. We build relationships with our Customers - both individuals and businesses - based on a wide range of additional benefits, services and options that allow us to increase sales. Last year we sold 16.7 TWh of electricity. This year, if we keep the trend from the first 9 months of 2017, we have a good chance of significantly exceeding this level. Enea Group s strategic investment a step towards comissioning On 1 September the first synchronisation of Unit 11 with the National Power System was performed, and in less than a month, i.e. on 19 December, we plan to commission a new 1,075 MW generating unit at Kozienice Power Plant for operation. The new unit will become an important pillar of our country's energy security and will at the same time be one of the most efficient of the kind in the world. Unit No. 11 is a key investment for Enea Group as well as for the entire Polish power industry. The project is characterised with the use of state-of-the-art technical solutions in the area of boilers, turbines and environmental protection. With a high efficiency of 45.6% of electricity generation and a high availability of over 92%, it will be the largest and most efficient coal-fired power plant in the Polish history. Our Customers can count on us in crisis situations Having handled the effects of the August storms that came over the part of Enea Operator's distribution area on the night of 11/12 August, our services faced another demanding test. On 5 October, as a result of Xavier hurricane, over 600 thou. of our Customers were deprived of power supply in almost 4 thou. locations. Failures caused by the hurricane were removed by over 320 brigades of Enea Operator, Enea Serwis and cooperating companies. Nearly 900 specialists fought to restore power supplies to all Recipients as quickly as possible. Power engineers worked continuously day and night, facing heavy weather conditions, which also caused a very difficult access to the damaged infrastructure. With the proper organisational preparation, logistics and titanic work of our Employees, we have restored electricity supplies to all our Customers. Damages in our infrastructure were also caused by Gregory hurricane which came over the Polish territory on the weekend of October. This year is special in terms of the frequency and scale of weather eventsaffecting the work of the power grids not only in our area. We have proven that we are able to work professionally in all conditions, primarily through the involvement of our Employees, who must be acknowledged and thanked. We invest caring for a stable financial situation We develop the Group's development potential through a balanced growth in all business segments, which is reflected in the financial and operational performance ratios resulting from the operations in the three quarters of In the three quarters of 2017, the Group recorded an increase in EBITDA of 6.5% compared to the same period of the previous year (PLN 1,947 mln). The increase in the result was attributable to good equity investments, an increase in the volume of sales of electricity, heat and distribution services. Looking for optimal solutions to ensure financial resources for the implementation of investment plans, we successfully use available programmes guaranteeing the co-financing of investments, e.g. in the distribution area (total co-financing obtained by EneaOperator - PLN 81.5 mln). Safe cash position allows us to undertake development work, both in terms of innovation and carrying out analyses of the possibilities of building a power unit based on coal gasification technology in the area of the Bogdanka mine. LW Bogdanka's acquisition of the mining license of the Ostrów field ensures that the decision to build the above mentioned unit is supported by the provision of adequate operational resources on the fuel side. Corporate Social Responsibility is a part of the entire Enea Group and is an important part of its business Enea Group is an active participant in the life of local communities. We help the needy, promote physical activity, and support numerous scientific and cultural initiatives. August storms caused damages not only to the power grid. Seeing the scale of damage in the communes from our distribution area, we decided to donate PLN 1 mln to the communes affected by the storms through Enea Foundation. This action is part of our conceptof corporatesocial responsibility. With the new school year, a collection of applications for Enea Talent Academy began, which is a program to support the development of young talents. Our activities are directed at children and young people and schools that want to develop the talents and passions of their students. We believe that such a support for the youngest members of our society and for projects and initiatives beyond the standard framework will translate into the development of their passion and will contribute to the responsible education of the next generations. We want to express our sense of responsibility to the environment from which we come andonwhich we depend. Yours faithfully, Mirosław Kowalik, President of the Management Board of Enea SA Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 7

8 KEY EVENTS IN Q1-Q I-II quarter Implementation of the investment agreement relating to the construction of a power unit in Ostrołęka Power Plant Enea SA and Energa SA jointly control the special purpose vehicle Elektrownia Ostrołęka SA, which will carry out the project of preparation, construction and operation of the 1,000 MW e coal-fired power unit (Ostrołęka C). Currently, Enea holds 23.8% of shares in the company s share capital. Both parties will ultimately hold 50% shares in Elektrownia Ostrołęka SA each and the same number of votes at a General Meeting. The companies foresee that the construction of the new unit will be completed in H2 2023, and the expenditures on the implementation of the investment will total ca mln PLN/MW. Taking up shares in Polimeks-Mostostal Currently, Enea holds 390,000,024 shares in Polimeks, constituting 16.48% share in the company s share capital. Together Enea, Energa, PGE Polska Grupa Energetyczna and PGNiG Technologie hold 156,000,097 shares, constituting 65.9% of Polimex's share capital. Polimex-Mostostal holds the largest, over 23% share in the implementation of core projects in the conventional energy sector. Due to this fact, the company is present in contractor consortia of the largest energy related investments in Poland, whose cumulative budget is ca. PLN 30 bln. Modernisation of two units turbines in Kozienice Power Plant In January, Enea Wytwarzanie and EthosEnergy signed an agreement relating to the modernisation of the turbines on units No. 3 and 8 in Kozienice Power Plant. Due to the modernisation the turbine sets dynamic state will be improved. The value of the contract is almost PLN 4.9 mln net, and the works were completed in July Extension of the agreement for banking services with PKO Bank Polski and Bank Pekao SA On 25 January Enea Group companies signed annexes to the agreements currently in force for the comprehensive bank services concluded with PKO BP and Pekao SA. Annexing the existing agreements for the next term provides Enea Customers with a guarantee that bank account numbers will remain the same. The Group s core companies will have access to all the necessary banking products and services within a comprehensive bank service on the most advantageous conditions. Flexible development, doubling the commodity base and innovations within Enea Group s Mining area On 9 February LW Bogdanka presented the strategy of development for the Area of Mining in Enea Group until 2030 which foresees two development scenarios: base, with the average production on the level of 8.5 mln tonnes during , and flexible development with the average annual production in that period on the level of ca. 9.2 mln tonnes. Having in mind the current and anticipated market situation the Company intends to implement the scenario of flexible development. CAPEX projected for (in nominal value) is PLN 3.7 bln for the base scenario and ca. PLN 4 bln for the flexible development scenario. Guaranteeing the reliability of electricity supplies In March Enea Operator started the newest and most modern Power Dispatch Centre (PDC) which will manage the high-voltage grid in north-western Poland. Such an organisation of traffic services enables a flexible, quick and comprehensive response to events occurring on the whole length of 110 kv grid belonging to Enea Operator. Enea the owner of Połaniec Power Plant - transaction with ENGIE successfully completed On 14 March, the transaction of purchasing 100 per cent of shares in ENGIE Energia Polska, the owner of Połaniec Power Plant, by Enea Group from ENGIE International Holdings B.V. was successfully closed. Enea obtained, for ca. PLN 1.26 bln, a major system power plant, which during the recent years has undergone a ca. 1.5 bln worth of an intensive modernisation programme. The acquired company is fully debt-free and has strengthened Enea on the market from the very first days. Enea joined the electromobility development cluster In April Enea group became a member of the cluster entitled Polish Electric Bus - electromobility supply chain. The goal of the cluster is to cooperate for electromobility development, in particular e-buses and components used for their construction, which will be based on technical solutions elaborated in Poland. Recapitalisation of Polska Grupa Górnicza As part of PGG recapitalisation Enea undertook to subscribe for new shares in PGG with the total nominal value of PLN 300 mln in consideration for the contribution in cash amounting to PLN 300 mln, in three stages: The first recapitalisation of PGG by Enea in the amount of PLN 150 mln was in April Within the second recapitalisation which was in June 2017 Enea took up new shares in PGG of the total value of PLN 60 mln, guaranteeing itself 5.81% share in the share capital of the mining company. Another recapitalisation amounting to PLN 90 mln is scheduled for Q The Investment is in line with Enea Capital Group s Development Strategy whose one element is securing the base of commodities for the conventional power engineering. Additionally, the investors concluded an agreement relating to the exercise of a joint control over PGG. Resignation from the acquisition of assets from EDF On 11 May the Management Board of Enea SA adopted a resolution on the resignation from the Company s participation in the transaction of acquiring Polish assets belonging to EDF International SAS and EDF Investment II B.V. Changes in the Management Board of Enea Innovation On 24 May the Extraordinary General Meeting of Shareholders of Enea Innovation, a company managing the innovation area in Enea Group, appointed Andrzej Wicik to the position of the President of the Management Board and Krzysztof Hajdrowski to the position of the Vice-President of the Management Board. Enea Operator with one, complete information system In June, Enea Operator signed an agreement for delivery and implementation of the Central Application for the Measurement Information Acquisition System. The application will ultimately be the sole IT system at the distribution company, which will acquire, process and store all data related to widely understood measurement information. The agreement s worth is PLN 22 mln and foresees the implementation of the application within two years. Cooperation for the development of technology within the preparation of a new fuel mix In June, Enea Trading and Polska Grupa Górnicza (PGG) commenced cooperation within the exchange of experience and knowledge in order to prepare a new fuel mixture using coal sludge which would be possible to use for the commercial exploitation in the energy sector. Fitch Ratings affirmed Enea s rating On 30 June Fitch Ratings agency affirmed the Company s long-term foreign- and local-currency issuer default ratings at BBB and also affirmed and simultaneously withdrew Enea's national long-term rating of A+(pol) with a stable outlook for commercial reasons. Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 8

9 KEY EVENTS IN Q1-Q III quarter Community funds drive investments in the Distribution area Implementing the planned investments Enea Operator has actively used the Community funds. In the period from January to September 2017 it concluded agreements for co-financing in the total amount of anticipated subsidy totalling PLN 81.5 mln. Submission of an application for a licence to mine coal from Ostrów deposit In July 2017 LW Bogdanka applied to the Minister of the Environment for a license to extract hard coal from the "Ostrów" deposit in "Ludwin mining area, with the operative resources estimated on the level of ca. 186 mln tonnes of coal. On 20 November LW Bogdanka s Management Board obtained information on the receipt by the Company of the above mentioned licence. Ostrów deposit utilisation may be commenced based on the current infrastructure and without a capital-intensive construction of new shafts. In the perspective after 2025 in Ludwin field a vertical deposit access is planned and construction of necessary objects and technical infrastructure. The total pre-estimated expenditures in real values connected with the construction of such the infrastructure amount to PLN bln. Obtaining the licence is the fundamental element of the plan to double the operative resources of the Company foreseen in the Strategy of LW Bogdanka Mining Area of Enea Group until Increasing the base of resources means a possibility of a long-term planning, securing the development of the mine and providing Bogdankawith a stable commodity backup. Enea shares profits with Shareholders On 10 August Enea distributed PLN 110,360,644.50, i.e. PLN 0.25 earnings per share, dividend to its Shareholders. Changes in the Management Board of Enea SA On 24 August the Supervisory Board of Enea adopted resolutions regarding the dismissal from Enea SA s Management Board of Wiesław Piosik, i.e. the Vice-President for Corporate Affairs, and of Mikołaj Franzkowiack i.e. the Vice-President for Financial Affairs. At the same time the Supervisory Board delegated on the same date the Member of the Supervisory Board, Rafał Szymański, to temporarily serve as the Vice-President of the Management Board for Corporate Affairs of Enea SA for the period not exceeding three months until a new Member of the Management Board for Corporate Affairs is nominated. On 22 September, the Supervisory Board of the Company adopted a resolution on the appointment of Piotr Olejniczak as a Member of the Management Board for Financial Affairs as of 1 October On 29 September, the Company received a resignation of Rafał Szymański, delegated by the Supervisory Board to temporarily perform the duties of the Member of the Management Board for Corporate Affairs of Enea SA, from the delegation to perform the above mentioned activities as of 5 October On 5 October 2017 the Supervisory Board of the Company adopted a resolution appointing Zbigniew Piętka as the Member of the Management Board for Corporate Affairs as of 10 October Successful first synchronisation of the new 1,075MW unit in Kozienice Power Plant On 1 September Enea Wytwarzanie successfully conducted the first synchronisation of the 1,075 MW unit with the Public Power System. The synchronisation was on schedule. Unit 11 operates according to the approved production plan. The new unit will increase the production capacity of Kozienice Power Plant in Świerże Górne to the level of 4 thou. MW, which will allow Enea Wytwarzanie to reach a 13% share in the electricity generation market. Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 9

10 2. Enea Group's organisation and operations

11 GROUP'S STRUCTURE Enea SA % number of votes at GA/SM in subsidiaries 100% 100% 100% 100% 64.57% Enea Operator sp. z o.o. Enea Elektrownia Połaniec SA Enea Wytwarzanie sp. z o.o. Enea Trading sp. z o.o. LW Bogdanka SA 100% Enea Innovation sp. z o.o. 20% Centralny System Wymiany 100% Informacji sp. z o.o. Enea Bioenergia sp. z o.o % 1.43% Przedsiębiorstwo Energetyki Cieplnej sp. z o.o. 100% EkoTRANS Bogdanka sp. z o.o. 100% Enea Centrum sp. z o.o. 100% Enea Pomiary sp. z o.o. 4.89% Tarnobrzeska Agencja Rozwoju Regionalnego SA (TARR) 100% Enea Ciepło Serwis sp. z o.o. 2) 100% RG Bogdanka sp. z o.o. 100% 100% Enea Oświetlenie sp. z o.o. Enea Logistyka sp. z o.o. 100% 61% Enea Serwis sp. z o.o. Annacond Enterprises sp. z o.o. 9.91% 7.38% 1) NZOZ Centrum Medyczne sp. z o.o. Zakłady Pomiarowo Badawcze Energetyki Energopomiar sp. z o. o. 7.38% 1) 91.14% 71.11% Enea Ciepło sp. z o.o. 3) Miejska Energetyka Cieplna Piła sp. z o.o. 100% 88.70% MR Bogdanka sp. z o.o. Łęczyńska Energetyka sp. z o.o. 100% 10% Energo-Tour sp. z o.o. under liquidation PGE EJ 1 sp. z o.o. 1% 99% Enea Badania i Rozwój sp. z o.o % KZM Kolzam SA under bankruptcy 25% ElektroMobility Poland SA 16.48% Polimex-Mostostal SA Polska Grupa Górnicza sp. z o.o. 5.81% 23.79% Elektrownia Ostrołęka SA Distribution Trade Generation Innovations Mining Other activity Companies in liquidation/bankruptcy 2.76% Tłocznia Metali PRESSTA SA under bankruptcy 6 leading entities operate within Enea Group, i.e. Enea SA (trade in electricity), Enea Operator sp. z o.o. (distribution of electricity) Enea Wytwarzanie sp. z o.o. and Enea Elektrownia Połaniec SA (generation and sales of electricity and heat), Enea Trading sp. z o.o. (wholesale trade in electricity) and LW BogdankaSA (coal mining). The other entities render supplementary services in relationto the aforementioned companies. The Group s structure includesalso minority interests in entities held by Enea SA s subsidiaries, i.e. in particularenea Wytwarzanie sp. z o.o. oraz LW BogdankaSA. 1) The change consists in adjusting the nominal value of the shares to the amount of the Company's share capital. 2) Former name of Przedsiębiorstwo Energetyki Cieplnej Zachód sp. z o.o. (change as of 16 November 2017) 3) Former name of Miejskie Przedsiębiorstwo Energetyki Cieplnej sp. z o.o. (change as of 16 November 2017) 11

12 CHANGES IN THE GROUP S STRUCTURE Asset restructuring After performing, in previous years, key organisational changes in Q1-Q3 2017, Enea Group, apart from the initiatives related to the planned changes, did not conduct any significant activities within assets restructuring. Equity disinvestments In the period of January-September 2017 no significant activities were performed as regards equity disinvestments. Changes in the Group's organisation In the period from January to September 2017 Enea Group continued activities focused on the implementation of the Group's Corporate Strategy. Equity investments Area Date Company Event Other activity Other activity Generation Other activity Generation Other activity Other activity 20 January February March April April April April 2017 Polimex- Mostostal SA Elektrownia Ostrołęka SA ENGIE Energia Polska SA (Enea Elektrownia Połaniec SA) PGG sp. z o.o. MPEC sp. z o.o. Polimex- Mostostal SA Elektrownia Ostrołęka SA Q1-Q Enea SA accepted the offer made by Polimex to take up, as a private subscription, 37.5 mln shares and acquired 1.5 mln shares of Polimex from its existing shareholder, taking up a total of 16.48% in the Company s share capital. Acquisition by Enea SA from Energa SA of 24,980,926 shares in Elektrownia Ostrołęka SA - Enea SA took up 11.89% in the Company s share capital. Enea SA acquired 100% shares from ENGIE International Holdings B.V. Enea SA took up 1,500,000 new shares of the nominal value of PLN 100 each and the total value of PLN 150,000,000 in Polska Grupa Górnicza sp. z o.o, becoming thus the minority shareholder of the Company with 4.39% shareholding in its share capital. Entry in KRS (National Court Register) - 8 June 2017 Increasing the share in the total number of votes in relation to the performance of agreements between authorised employees of MPEC sp. z o.o and Enea Wytwarzanie sp. z o.o. As a result of the tender offer Enea SA purchased 24 shares in Polimex constituting % share in the Company s share capital. Enea SA accepted an offer made by Elektrownia Ostrołęka SA of taking up as a private subscription of 9.5 mln new shares in Elektrownia Ostrołęka SA. Area Date Company Event Other activity Other activity Other activity Innovations Generation Distribution 14 June June June August September October 2017 PGG sp. z o.o. Elektrownia Ostrołęka SA Centralny System Wymiany Informacji sp. z o.o. Enea Innovation sp. z o.o. Enea Badania i Rozwój sp. z o.o. Enea SA took up 600,000 shares in the raised share capital of PGG, of the total nominal value of PLN 60,000,000, increasing thus its shareholding in the Company s share capital from 4.39% to 5.81%. Entry in KRS (National Court Register) 7 July 2017 Acquisition by Enea SA from Energa SA of 20,017,269 shares in Elektrownia Ostrołęka SA - Enea SA holds a total of 23.79% in the Company s share capital. Transfer of ownership of 16 shares to 4 distribution companies (Innogy Stoen Operator sp. z o.o. (formerly: RWE Stoen Operator sp. z o.o.), Energa Operator SA, PGE Dystrybucja SA, Tauron Dystrybucja SA). Enea Operator sp. z o.o. presently holds 4 shares in CSWI sp. z o.o., which is 20% share in the Company s share capital. The Extraordinary General Meeting of Shareholders of Enea Innovation sp. z o.o. seated in Warsaw, share capital PLN 5,000, decided to raise the share capital by PLN 300,000, i.e. from PLN 5,000 to PLN 305,000, through the issue of 3,000 new shares of the nominal value PLN 100 each. Pending the entry in KRS. The company was incorporated on 4 April 2017 by Enea Wytwarzanie sp. z o.o. and Enea SA. Enea SA holds 1 share in the company. On 28 September 2017 the Company was entered into the National Court Register. Events after the reporting period Enea Operator sp. z o.o. The Extraordinary General Meeting of Shareholders of Enea Operator sp. z o.o. Decided on the raising of the share capital by PLN 5,023, (contribution in kind being the title to and perpetual usufruct of a real estate owned by Enea SA), i.e. from the amount of PLN 4,678,050, to PLN 4,683,073, by creation of new shares of the nominal value of PLN 100 each. Another step will be making a declaration on taking up the shares and assignment of the title to the property. A detailed description of equity holdings is presented in the condensed interim consolidated financial statements of Enea Capital Group for the period from 1 January to 30 September

13 AREAS GENERATION Generation of electricity based on bituminous coal, biomass, gas, wind, water and biogas Heat generation Heat transmission and distribution Trade in electricity DISTRIBUTION Electricity supply Planning and guaranteeing the extension of the distribution network Exploitation, maintenance and renovations of the distribution network Metering data management MINING Production of bituminous coal Sale of bituminous coal Securing the base of resources for the Group ENEA GROUP S BUSINESS AREAS TRADE Retail sales: Trade in electricity and gas on the retail market Range of products and services adjusted to Customer needs Comprehensive Customer Service Wholesale trading: Electricity and gas wholesale contract portfolio optimisation Operations on product markets Guaranteeing access to wholesale markets 13

14 AREAS Mining LW Bogdanka is one of the leaders on the market of bituminous coal producers in Poland, outstanding in the sector as regards the financial results generated, efficiency of bituminous coal mining and investment plans providing for the availability of new deposits. The bituminous power coal sold by the Company is used mainly for the generation of electricity, heat energy and cement production. The Company s customers in the majority include industrial companies, mainly entities conducting business activity in the power sector located in the eastern and north-eastern Poland. Description Q1-Q Q1-Q Change Q Q Change Net production [ 000 tonnes] % % Coal sale [ 000 tonnes] % % Closing stocks [ 000 tonnes] % % Roadway works[km] % % Distribution network of Enea Operator Lublin Coal Basin 14

15 AREAS Generation Power Plants: Kozienice, Połaniec Białystok Heat and Power Plant, MEC Piła, PEC Oborniki, PEC Zachód 1), MPEC Białystok 2) Wind farms: Bardy, Darżyno, Baczyna 21 hydroelectric plants Biogas plants: Gorzesław, Liszkowo Distribution network of Enea Operator Generation of electricity and heat - Enea Wytwarzanie Data of Enea Wytwarzanie excluding unit No. 11 in Kozienice Power Plant Description Q1-Q Q1-Q Change Q Q Change Total generation of electricity (net) [GWh], including: % % Net production from conventional sources [GWh], including: % % Enea Wytwarzanie (excluding biomass co-combustion) % % Enea Wytwarzanie - Segment of Heat (Białystok Heat and Power Plant % ,350.0% excluding biomass co-combustion) MEC Piła % % Production from renewable energy sources [GWh], including: % % Combustion of biomass % % Enea Wytwarzanie - Segment of RES (hydroelectric plants) % % Enea Wytwarzanie - Segment of RES (wind farms) % % Enea Wytwarzanie - Segment of RES (biogas plants) % Generation of heat [GJ] % % Data of unit No. 11 in Kozienice Power Plant, under start-up Enea Group's generation assets Description Installed electrical capacity [MW e ] Attainable electrical capacity [MW e ] Installed heating capacity [MW e ] Kozienice Power Plant Połaniec Power Plant Bialystok Heat and Power Plant Wind Farms: Bardy, Darżyno and Baczyna Liszkowo and Gorzesław Biogas Plants Hydroelectric plants MEC Piła PEC Oborniki MPEC Białystok ) From 16 November 2017 Enea Ciepło Serwis sp. z o.o. 2) From 16 November 2017 Enea Serwis sp. z o.o. Description Q1-Q Q1-Q Q Q Total generation of electricity (net) [GWh], including: Net production from conventional sources [GWh] Production from renewable energy sources [GWh] Generation of heat [TJ] Generation of electricity and heat - Enea Połaniec Power Plant Description Total generation of electricity (net) [GWh], including: Enea Połaniec Power Plant net generation form conventional sources Enea Połaniec Power Plant generation from renewable energy sources (biomass combustion green unit) Enea Połaniec Power Plant generation from renewable energy sources (biomass co-firing) Q1-Q Q1-Q March - 30 September 2017 (in Enea CG) Q Q Generation of heat [GJ]

16 AREAS Generation Purchase of electricity by Enea Wytwarzanie on the wholesale market In Q1-Q the volume-related electricity purchases in Kozienice Power Plant amounted to 1,433.8 GWh. The purchases were made for the needs of energy trading operations GWh. Additionally, GWh of energy was purchased within the Balancing Market. In the Segment of Heat the purchase volume in Q1-Q amounted to 18.4 GWh - acquisition on the Balancing Market is 12.8 GWh, purchase in the trade of 5.6 GWh. Energy trading (sales=purchases) is performed within market possibilities guaranteeing achievement of the anticipated financial result and in order to limit the failure consequences. Purchase of electricity as part of Q1-Q trade related mainly to Kozienice Power Plant and constituted 51% of the whole energy purchases. Purchase of electricity within the Balancing Market accounted for 49%. Purchases within the trade in the Segment of Heat stemmed from activities reducing the costs of generating units' failuresand lackof availablepower vs. concludedcontracts. Purchase of electricity by Enea Połaniec Połaniec Power Plant on the wholesale market In Q1-Q the volume-related electricity purchases in Enea Elektrownia Połaniec amounted to 1,736 GWh. The purchases were made for the needs of energy trading operations in the amount of 685 GWh. Additionally, GWh of energy was purchased within the Balancing Market mechanisms. Sales of electricity by Enea Wytwarzanie Sales volumes of electricity in Enea Wytwarzanie in the period from January to September 2017 amounted to 11,371 GWh. Sales were performed by individual segments depending on the statutory obligations and concluded agreements. Sales of electricity as part of Kozienice Power Plant s own sales Sales of electricity in Q1-Q as part of Kozienice Power Plant s own sales amounted to 10,808 GWh. In that period Enea Wytwarzanie had a statutory duty to sell the generated electricity on a commodity exchange (art. 49a of the Energy Law) which was performed on the level of 16.7%. The other sales include sales within Enea Group 80.2% and to the Balancing Market (PSE SA) 3.1%. Sales of electricity as part of the segment of Heat In the Segment of Heat sales of electricity in the period from January to September 2017 amounted to 312 GWh - sales within Enea Group accounted for 92.4%, sales within the Balancing Market (PSE SA) 5% and sales to end users amounted to 2.6%. Sales of electricity as part of the segment of RES In the Segment of RES sales of electricity in Q1-Q amounted to 250 GWh (beyond Enea Group - 42%, within Enea Group - 58%). Sales of electricity as part of the area of Wind Description Q1-Q Q1-Q Change Fixed price [PLN 000] % Average weighted price [PLN/MWh] % Sales of electricity within Subsidiaries Sales of electricity within Subsidiaries in Q1-Q amounted to 47 GWh. Sales of electricity by Enea Elektrownia Połaniec In Q1-Q the volume-related electricity sales in Enea Połaniec Power Plant amounted to 8,648 GWh, of which 1,490GWh was energy from RES. Fuel supply - Enea Wytwarzanie Data of Enea Wytwarzanie excluding unit No. 11 in Kozienice Power Plant Fuel type Data of unit No. 11 in Kozienice Power Plant, under start-up Fuel type Enea Wytwarzanie Kozienice Power Plant Q1-Q Q1-Q Change Volume ['000 t] Q1-Q Q1-Q Change Volume ['000 t] Costs 1) [PLN mln] Costs 1) [PLN mln] Volume ['000 t] Volume ['000 t] The basic fuel used to produce electricity is bituminous coal (fuel dust). In Q1-Q3 2017, the main supplier of coal to Enea Wytwarzanie was LW Bogdanka SA (around 85.4% of supplies). Additionally, coal supplies were performed by Polska Grupa Górnicza sp. z o.o. (ca. 14.2% of supplies) and Jastrzębska Spółka Węglowa SA (ca. 0.4%). In Q the coal supplies were split as follows: LW Bogdanka SA - ca. 78.0% of supplies, Polska Grupa Górnicza sp. z o.o. - ca. 21.9% of supplies, Jastrzębska Spółka Węglowa SA - ca. 0.1% od supplies. In Q1-Q biomass was not co-fired in Kozienice Power Plant. Costs 1) [PLN mln] Costs 1) [PLN mln] Qty Costs 1) Bituminous coal Fuel oil (light) 2) TOTAL - 41 Qty Costs 1) Bituminous coal % 4.8% Biomass % -79.7% Fuel oil (heavy) 2) % Gas ['000 m 3 ] 3) % -17.6% TOTAL ) Including transport 2) Light-up fuel in Kozienice Power Plant 3) Used for the production of electricity and heat energy in MEC Piła and heat energy in PEC Oborniki 16

17 AREAS Generation Enea Wytwarzanie - Segment of Heat The basic fuels used in Enea Wytwarzanie in the Segment of Heat (Białystok Heat and Power Plant) include: coal and biomass - mainly as wood chips, energetic willow chips and agricultural production left-overs and sunflower husk pellet. In the period from January to September 2017, the volume of supplied biomass amounted to over 99 thou. tonnes, and the supplies were performed by 10 entities. They were significantly smaller than in the same periods of previous years due to e.g. a complete renovation of the turbine set on the biomass unit. Approximately 10% of biomass was delivered to the area of Enea Wytwarzanie - Segment of Heat, using a rail transport. In Q1-Q the coal supplies to Enea Wytwarzanie - Segment of Heat were performed by Polska Grupa Górnicza sp. z o.o. and LW Bogdanka SA (ca. 13%). Coal supply - Enea Połaniec Power Plant Fuel type Q1-Q Q1-Q Change Volume ['000 t] Costs 1) [PLN mln] Volume ['000 t] Costs 1) [PLN mln] Qty Costs 1) Bituminous coal % 0.2% Coal transport - Enea Wytwarzanie Enea Wytwarzanie Kozienice Power Plant The only means of transport used to deliver bituminous coal to the Kozienice Power Plant in the period of: January September 2017 was rail transport. PKP Cargo SA shipper performed ca. 92% of supplies and Koleje Czeskie sp. z o.o. ca. 8% of supplies. July September 2017 was rail transport. PKP Cargo SA shipper performed ca. 78% of supplies and Koleje Czeskie sp. z o.o. ca. 22% of supplies. Enea Wytwarzanie - Segment of Heat Coal supplies to Enea Wytwarzanie - Segment of Heat in Q1-Q were performed with rail transport by PKP Cargo SA. Prices of fuels included the cost of delivery to Białystok Heat and Power Plant generating source. Coal transport - Enea Połaniec Power Plant In Q1-Q coal transport in Enea Połaniec Power Plant was performed mainly by PKP Cargo SA and CTL Logistics sp. z o.o. Some supplieswere performedby EPCT Silesia, PGG andjsw. Biomass % -10.9% Fuel oil % TOTAL % In Q1-Q3 2017, the main supplier of coal to Połaniec Power Plant was LW Bogdanka SA. 1) Including transport 17

18 AREAS Distribution km km units units MWh MWh km units MWh km units km MWh units MWh Length of power lines Transformer stations Quantity of energy supplied in Q1-Q Number of Customers Distribution area of Enea Operator Technical indicators Description: Q Q Change Q1-Q Q1-Q Change SAIDI planned interruptions and unplanned interruptions including catastrophic ones % % (HV, MV) [minutes] 1) SAIFI planned interruptions and unplanned interruptions including catastrophic ones % % (HV, MV) [pcs] 1) Contract performed in the reference term 18 months - group IV [%] Contract performed in the reference term 18 months - group V [%] Sales of distribution services and number of customers Description: Q Q Change 86.90% 98.66% p.p % 97.80% p.p % 98.90% 2.15 p.p % 98.10% 2.54 p.p. Q1-Q Q1-Q Change Sales of distribution services [GWh] % % Number of recipients at the end of the period [pcs] % % Sales of distribution services [GWh] Length of power lines [ 000 km] RAB [PLN 000] 5.94 Grid loss index [%] 2) Q1-Q Q1-Q Number of transformer stations [ 000 pieces] Number of connections [ 000 pieces] Length of power lines [ 000 km] Business customers Household Total 1) The deterioration of the reliability index was caused by a sudden, unpredictable and catastrophic weather event, which took place in August this year. As a result, the SAIDI index rose by 170 min and SAIFI by ) The grid loss ratio was calculated on a rolling basis for the last 12 months 18

19 AREAS Trade The diagram below presents the operating dependencies between Enea Group companies and business partners and Customers in the area of Trade: Sources of acquisition of electricity and gas Sales directions of electricity and gas Local market All producers generating energy in RES and cogeneration (water, wind, biogas power plants) Enea Retail Customer Prosumers 32 modern Customer Service Centres Forward and SPOT market Enea Trading Wholesale Customer Customer Service Centre Internal and balancing market Enea Wytwarzanie Distribution network of Enea Operator 19

20 AREAS Trade Sales of electricity and gas to retail customers realised by Enea SA In Q1-Q3 2017, as compared to the same period of 2016, there was a significant growth in the total volumes sold by 743 GWh, i.e. by over 5%. The growth in the volumes of sales was observable in the business segment (by 776 GWh, i.e. by ca. 8%). This is the result of greater electricity sale volumes by 975 GWh, i.e. by almost 11% and reduced gas sale volume by 199 GWh, i.e. by 21%. The volume growth in sales of electricity in the business segment translated into greater comprehensive revenue from sales of electricity by PLN 81 mln, i.e. by around 3%, in relation to the same period of Yet, a drop in revenue from sales of gas by PLN 37 mln stemmed from both the volume and the average selling price. As a consequence, the total revenue from sales of electricity and gas in Q1-Q was by PLN 44 mln higher than in the same period of the previous year. GWh Sales of electricity and gas to retail customers of Enea SA Electricity Gas Q1-Q Q1-Q Business consumers Q1-Q Q1-Q Households Q1-Q Q1-Q Total PLN mln Revenue from sales of electricity and gas to retail customers of Enea SA Electricity Gas Q1-Q Q1-Q Q1-Q Q1-Q Q1-Q Q1-Q Busines consumers Households Total 20

21 DEVELOPMENT STRATEGY Enea Capital Group s Development Strategy until assumptions Mission Enea delivers constantly improved products and services, anticipating Customers expectations due to motivated teams working in a friendly, safe and innovative organisation. Vision Enea is a leading supplierof integrated raw materials and energy related productsand services and other innovative services for the wide range of Customers, recognisedfor the quality, comprehensiveness and reliability. Basic investment fund in the amount of PLN 26.4 bln Estimated capitalexpenditures of Enea CG during [PLN mln, currentprices] Area Mining Distribution Generation Other Enea CG Total basic investment fund CAPEX potential 1) Increasing the investment potential 2) Enea CG Total ) CAPEX potential maintaining the net/ebitda ratio on a safe level 2) Increasing the investment potential by PLN 5.7 bln as a result of the implementation of innovative strategic initiatives (growth in EBITDA) Enea defined 60 strategic initiatives of which over 50% is innovative in nature. The implementation of potential-enhancing initiatives will support e.g. the development of innovative products, services and business lines of Enea CG Clean coal technologies (including IGCC) Electromobility Development of distributed poly-generation Services within the Internet of Things Hybrid RES Integrated packages of products and services Repository of intelligent solutions Prosumer installations Best practices and growth in mining effectiveness Development of micro- and macro-clusters of energy Smart distribution network Operator s services (including for micro-grids and mines) 21

22 DEVELOPMENT STRATEGY Enea Capital Group s Development Strategy until level of implementation 359 Return on equity (ROE) 7.1% 10% SAIDI [minutes] % 2015 LTM 1) LTM 1) 3) % 5% Return on assets (ROA) SAIFI % 2015 LTM 1) LTM 1) 3) % Sales of electricity for end customers [TWh] Grid loss in distribution index 5.9% 5.9% 2015 LTM 1) LTM 1) 2025 Installed conventional generation capacities [GW] Own annual consumption of bituminous coal 43% 66% 75% As atthe end 2015 of Q ) LTM 1) ) LTM for Q Q ) Excluding unit No. 11 3) Higher ratios as a result of weather phenomena of an unprecedented strength 22

23 IMPLEMENTED ACTIVITIES AND INVESTMENTS Capital expenditures in Q1-Q Capital expenditures [PLN mln] Investments implemented in Q1-Q Q1-Q Q1-Q Plan Plan implementation level Generation % Distribution % Mining ) % Support and other % TOTAL Plan implementation ) 56.8% Equity investments 2) TOTAL expenditures of Enea CG ) The amount excludes PLN 0.4 mln expenditures incurred in Q1-Q by subsidiaries of LW Bogdanka SA 2) Not included in Enea CG s material and financial plan 3) The amount of expenditures resulting from the adjustment of Enea CG s Material and financial plan approved by Enea s Supervisory Board with the resolution No. 38/IX/2017 of 29 June 2017 Capital expenditures in Q1-Q Equity investments 2) Generation Distribution Mining Support and other Mining Generation Distribution Obtaining newlicences: application for a new mining licences in Ostrów and K-6 and K-7 areas Maintaining the machinery - purchase and assembly of machines and equipment and periodic repairs, purchase and assembly of a belt-conveyor and other ready equipment Other development and replacement investments: executionof22.5 km of newexcavations extension of the plant for mining waste neutralisation replacement investments in Zakład Przeróbki Mechanicznej Węgla, e.g. modernisationof steel structures and stone loading station tower craneinstallation Enea Wytwarzanie: successive stages of the construction of a supercritical bituminous coal fired 1,075 MW e power unit launchingunit No. 3 after modernisation launchingunit No. 8 after modernisation unit No. 4 - obtaining the operating permit and commissioning of the installation of the catalytic denitrogenation of flue gases (SCR) continuation of the SCR installation for units No. 4-8 continuation of the SCR installation and modernisation of electrostatic precipitators for units No. 9 and 10 as part of the 2 x 500 MW units modernisation programme Enea Elektrownia Połaniec: execution of connection between SCR installation and boiler for units No. 7 and 2 Completion of the realisation of a range of investments related to the extension, automation and modernisation of the unit and power grids Continuation of existing and commencement of new investments whose implementation will be conducted during 2017 and next years Continuation of improving the connections of Customers to the power grid Continuation of the development of information tools supporting the grid management 23

24 IMPLEMENTED ACTIVITIES AND INVESTMENTS Investments planned until the end of 2017 within the currently held assets Mining Distribution Development investments Operating investments Other investments Generation Obtaining newlicences: continuation of the process of applying for a licence as regards K-6, K-7 and Orzechów areas obtaining a licence to mine hard coal from Ostrów deposit 1) Maintaining the machine park: purchaseand assembly of newmachines andequipment modernisation and renovations of machinery and equipment New excavations and modernisation of the existing ones: performance of excavations, mainly wall roadways, face lines and other technological and access excavations, enabling exploitation of walls modernisation of mining excavations Other development and replacement investments: extension of the plant for mining waste neutralisation in Bogdanka continuation of works related to the Production management integrated system and Smart solutions mine project Key investments being implemented Implementation of smart grid development programme Continuation of a programme enhancing grid reliability Continuation of the Grid Information System project Construction and modernisation of a range of grid infrastructure elements, such as HV, MV and LV lines and transformer stations, including e.g.: Reconstruction of GPZ Kostrzyn Reconstruction of GPZ Jachcice Reconstruction of GPZ Wronki Reconstruction of GPZ Piła Południe Reconstruction of GPZ Żary Reconstruction of 110 kv Morzyczyn Drawski Młyn line (including Dobiegniew Krzęcin) Reconstruction of 110 kv Gryfino - Żydowce line Construction of GPZ Choszczno II and GPZ Recz Construction of GPZ Garbary and construction of 110 kv Garbary-Cytadela, Garbary-EC Karolin lines Construction of RS Garaszewo and construction of 110 kv Kromolice - Nagradowice, Kromolice - Gądki, Kromolice - Swarzędz lines Construction of 110 kv Piła Krzewina - Miasteczko Krajeńskie line and reconstruction of GPZ Miasteczko Krajeńskie Enea Wytwarzanie Continued Segment of Heat Construction of power unit No. 11 (completion in 2017) Installation of flue gases denitrification - SCR for units No. 4-8 (completion in 2017) Installation of flue gases denitrification - SCR for units No (completion in 2019) Modernisation of the slag and ash depot Construction of flue gas desulphurisation plant on K7 and K8 boilers (completion in 2017) Segment of RES Searching for bargain investment and acquisition projects Enea Elektrownia Połaniec SCR installation for units No. 2, 3, 7 (completion in 2017) and for unit No. 4 (completion in 2018) 1) LW Bogdanka SA informed on obtaining the licence in the current report no. 27/2017 of 20 November

25 IMPLEMENTED ACTIVITIES AND INVESTMENTS Status of works on the key investment projects Investment Project status CAPEX Q1-Q [PLN mln] Total CAPEX [PLN mln] Work progress [%] Anticipated date of completion Construction of a 1,075 MW power unit No. 11 In Q the following works were completed on the construction site: First coal feeding to the boiler Boiler start-up Boiler deslagger start-up Power grid protection check-up Transformer protection check-up Coal mill hot start-up Electrostatic precipitator hot start-up Start-up of electrostatic precipitator s ash removal system IOS hot start-up First synchronisation with the power grid % 2017 IOS IV flue gas desulphurisation plant The following installations were commissioned: main unit of IOS IV, flue gas channels, auxiliary ventilators, chimney No. 3, IOS IV power supply All the devices and installations operate according to the technical parameters included in the agreements. What is still to be executed is the scope relating to the COD chemical oxygen demand in treated waste-water from IOS IV installation % 2017 Modernisation of unit No. 3 On 28 March 2017 unit No. 3 was commissioned % 2017 Enea Wytwarzanie Modernisation of unit No. 8 On 6 March 2017 unit No. 8 was handed over for modernisation. Unit outage ended on 21 July % 2017 Modernisation of unit No. 9 as a part of 2 x 500 MW units modernisation programme Modernisation of cooling water intake - stabilising check dam on the Vistula River In 2018 the modernisation of unit No. 9 is planned. Currently, the material scopes and tender documents are being prepared relating to the works connected with the modernisation. Agreement for the turbine and boiler parts was concluded % 2018 Theproject isat the stage of preparation for realisation. Theenvironmental decision ispending % 2017 Installation of the catalytic denitrogenation of flue gases and modernisation of electrostatic precipitators for AP boilers of units No. 9 and 10 as a part of the 2 x 500 MW units modernisation programme On 30 September 2016 an agreement was signed with Rafako for the performance of the installation of the catalytic denitrogenation of flue gases with modernisation of electrostatic precipitators for AP of units no. 9 and 10. An agreement was concluded for the Contract Engineer services The installation of unit No. 10 is in progress % 2019 Installation of flue gases denitrification - SCR for units No. 4-8 Completion of the SCR installation of flue gases denitrification on units No. 4, 5, 6 and 7 and the common part for SCR installation for units No On 15 September 2017 the SCR for unit No. 8 was commissioned. Guarantee measurements are being performed % 2017 Construction of flue gas desulphurisation plant on K7 and K8 boilers An agreement was concluded with the National Fund of Environmental Protection and Water Management for the co-financing of the investment as a loan. On 2 February 2016 the Contract Engineer was appointed. On 28 April 2016 the permit for the construction of IOS K7 and K8 became final. On 29 September 2017 the installation was commissioned. Preparation is in progress for performance of guarantee tests % 2017 Modernisation of unit No. 10 as a part of 2 x 500 MW units modernisation programme On 21 July 2017 the unit was handed over for modernisation. The modernisation is scheduled to be completed on 22 January % 2018 Enea Elektrownia Połaniec SCR installation - units No. 2, 3, 7 Completion of connecting the external part on units No. 7 and 2. System regulation on unit No % 2017 SCR installation - unit No. 4 Execution works are in progress of the external part of SCR installation of flue gases denitrification on unit No %

26 IMPLEMENTED ACTIVITIES AND INVESTMENTS Activities implemented in Q1-Q Activities to be realised until the end of 2017 Area of Retail Sales Area of Customer Service Educational and informative campaign warning against unfair energy sellers Introduction of ENERGY+ Family product Conducting a client base actualising campaign - You win in Enea Launching the promotion - A month of Free Energy with the marketing campaign Publication of results of customer satisfaction surveys Conducting a spring, summer and autumn promotion of the Purchase Zone loyalty programme Promoting the electronic Customer Service Centre (ecsc) New Impulses 2017 award for a successful implementation of the idea of Energy Plus - a new model of customer relations and market operation Completion of the implementation of the first and second stage of a multichannel Contact Centre platform which translated into a growth in the reliability / safety of operation of remote Customer service channels Launch of new functionalities: web chat, Customer Satisfaction Survey, soft debt collection, welcome phone, etc. Opening visualised Customer Service Centres in Chojnice, CH Pestka in Poznań, Września and Szczecin, 15 Struga street Opening new locations of the Contact Centre in Szczecin Implementation of changes in the organisational structure within the Support and Settlement Divisions Completion of the first stage of development of an electronic Customer service within launching new service subpages Selection of the contractor of the gas fuel billing system and signing the contract with the supplier Implementation of the new Enea Smart product offering with marketing communications Conducting customer service quality and satisfaction surveys Adjust the offer to the business promotion SME/SOHO segment Carrying out a holiday promotional campaign in the Purchase Zone Implementation of the tariff process within the scope regulated by the President of the Energy Regulatory Office Visualisation of selected Customer Service Centres Higher quality and scope of services by remote contact channels as a result of increasing the catalogue of Customer matters realised by first contact Termination of the implementation of the third stage of the multi-channel Contact Centre channel due to which Customers will be provided with a new contact channel - IVR (Interactive Voice Response) self-service Commencement of the second stage of the development of an electronic Customer service within the selection of the systemic changes executor, drafting mock-ups and graphic projects, preparation of a functional project and developing new functions i ecsc As regards the Simple Customer Service initiative, scheduled implementation of new templates of letters in simple Polish for a coherent and friendly communication with Customers and Offices Continuation of works related to the implementation of the functional project of gas service system Undertaking works on verification of introduced organisational changes within the framework of the Simple Customer Service initiative Area of Wholesale Trade Drafting the methods of analysing the results of the designed mechanisms of the capacity market Improvement of a model of long-term price paths for products listed on wholesale markets Conclusion of framework agreements enabling transactions with Enea Połaniec Power Plant (EEP) relating to the electricity, allowances for emissions of CO 2 and proprietary interests contract update Adjustment to the changes resulting from increasing generation assets on Enea Group as regards the improvement of tools and methods of portfolio management and hedging positions within the whole added value chain Coordination of the planning and contractation principles as results from the extension of the fuel portfolio Integration of EEP s operations within the structures of Enea CG. Takeover of the function of a Technical and Commercial Operator in the communication with PSE SA after a prior provision of the access to the wholesale market Takeover of the function of providing EEP with fuels (coal, biomass, ignition oil) Determination of the coal supply terms for 2018 for ca. 75% demand of Enea Wytwarzanie and EEP Commencement of the cooperation within coal flotation concentrates and sludge management Commencing cooperation with JSW SA in the field of coal sludge in the power units of Kozienice Power Plant Drafting the contracting model for energy coming from RES for installations with installed capacity from 500kW and more, after the expiry of the obligation to purchase energy through the obligated seller, i.e. from 1 January 2018 Improvement of analytical models and tools supporting hedging and proprietary trading on domestic and foreign markets Development of the fundamental model of long-term price paths for bituminous coal Development of tools supporting distributed generation in relation to the changes in the renewable energy sources support mechanisms which enter into force after 1 January 2018 Contractation of generation fuel supply for planned energy generation for 2018 Development of tools allowing for effective prop-trading operations as regards short-term trans-border transactions Further EPP integration gradually covering next aspects of operations. Continued contractation of generation fuel supply for planned energy generation for 2018 Conduct of analyses and conceptual works for the needs of changing the coal purchase model Fuel logistics optimisation Agreement with JSW SA of long-term coal supplies to Enea Wytwarzanie - generation source of Kozienice Power Plant 26

27 CONCLUDED AGREEMENTS Financing sources of the investment programme Enea SA finances the investment programme using financial surpluses from the conducted business operations and external debt. Enea Capital Group realises the investment financing model in which Enea SA obtains external funding and distributes it to its subsidiaries. Enea SA's further actions will concentrate on guaranteeing the appropriate level of diversification of external financing sources for investments planned in Enea Group Strategy in order to optimise the amount of costs and dates of debt repayment. Programme Agreement on the bond issue programme up to the amount of PLN 3 bln Enea SA holds the programme agreement relating to the bond issue programme up to the amount of PLN 3 bln with banks operating as Underwriters, i.e.: PKO BP SA, Bank Pekao SA, BZ WBK SA and Bank Handlowy w Warszawie SA. The financing is not hedged on Enea Capital Group s assets. The funds obtained from the programme are allocated to the realisation of investment projects in Enea Group, including e.g. for the construction of the 1,075 MW e gross supercritical bituminous coal fired power unit, which is being constructed as a part of Enea Wytwarzanie's operations. In the period from January to September 2017 Enea SA, within the said programme, issued PLN 140 mln value of bonds of the 9 th series. As at 30 September 2017 the value of the bonds issued within the aforementionedprogramme totalled to PLN 2,091 mln. 70% Programme Agreement on the bond issue programme up to the amount of PLN 5 bln On 30 June 2014, Enea SA concluded a programme agreement relating to the bond issue programme up to the amount of PLN 5 bln with five banks acting as dealers: ING Bank Śląski SA, PKO BP SA, Bank Pekao SA and mbank SA. As a part of the Programme Enea may issue bonds with the maturity of up to 10 years, and Bank dealers have the duty of care when offering the sale of bonds to market investors. In the period from January to September 2017 Enea SA did not issue bonds within the programme. As at 30 September 2017 the value of the bonds issued within the aforementioned Programme totalled PLN 1,500 mln. 30% Financing source utilisation rate Financing source utilisation rate Programme Agreements on the bond issue programme guaranteed by BGK On 15 May 2014, Enea SA concluded a programme agreement relating to the bond issue programme up to the amount of PLN 1 bln guaranteed by Bank Gospodarstwa Krajowego. The financing is not hedged on Enea Capital Group s assets. The funds from that programme are allocated e.g. to the implementation of the investments by Enea SA and its subsidiaries. Enea SA issued bonds in the said Programme of the total value of the Programme being PLN 1 bln. The bond redemption period is maximally 12.5 years from the date of their issue. The interest is based on floating WIBOR rate increased with the margin. On 3 December 2015, Enea SA concluded another programme agreement relating to the bond issue programme up to the amount of PLN 700 mln guaranteed by Bank Gospodarstwa Krajowego. The funds from that programme are allocated e.g. to the implementation of the investments and financing the current operations of Enea SA and its subsidiaries. As at 30 September 2017, Enea SA issued bonds in the said Programme of the total value of PLN 150 mln. Financing source utilisation rate 68% Investment loans granted by the European Investment Bank On 18 October 2012, Enea SA concluded a financial agreement with the European Investment Bank (EIB) based on which the Company was granted a loan in the amount of PLN 950 mln or its equivalent in EUR (tranche A ). On 19 June 2013, another loan agreement (tranche "B") was concluded with EIB for the amount of PLN 475 mln. The funds in the total amount of PLN 1,425 mln obtained from the loan are designated for the financing of a multiannual investment plan regarding the modernisation and extension of the power grids of Enea Operator. The loan repayment period is up to 15 years from the planned disbursement of the facility. Within "A" and "B" tranches, Enea SA drew funds from the loan in full, i.e. in the amount of PLN 1,425 mln in 4 separate amounts paid out from September 2013 to July The currency of the disbursed loan is Polish zloty, floating rate, based on WIBOR rate for 6-month deposits, increased with the Bank's margin. In the case of one disbursement the interest was based on the flat interest rate. On 29 May 2015 another loan agreement was concluded based on which EIB provided the Company with new financing in the amount of PLN 946 mln or its equivalent in EUR (tranche C ). The funds obtained from the loan will be allocated to the financing of a multiannual investment plan in order to modernise and extend the power infrastructure of Enea Operator. The financing is not hedged on Enea Capital Group s assets. The interest rate is floating based on WIBOR rate for 6-month deposits increased with the Bank s margin. The tranches will be paid in instalments, and the final repayment will be made in December In January 2017 the loan tranche was disbursed in the amount of PLN 250 mln. As at 30 September 2017, the amount of the loan utilised within tranche C was PLN 450 mln. 79% Financing source utilisation rate LW Bogdanka investment programme financing sources - programme agreements relating to the issue of LW Bogdanka SA s bonds In 2017 the Company held a Framework Agreement of 23 September 2013 relating to the bond Issue programme up to the amount of PLN 300 mln which was concluded with Polska Kasa Opieki SA bank. The total value of the bonds issued within this Agreement is PLN 300 mln. Quarterly maturity dates of the bonds in the total amount of PLN 300 mln are in Moreover, during H another Programme Agreement dated 30 June 2014 was in force. On 10 March 2017 the Company signed an annex to the Programme Agreement of 30 June 2014 within which the term of the Programme for Tranche 1 was shifted from 31 December 2019 to 30 March In relation to that all the bonds issued within Tranche 1 in the total amount of PLN 300 mln were redeemed on 30 March 2017, and thus the term of the Programme Agreement expired. 100% Financing source utilisation rate 27

28 CONCLUDED AGREEMENTS Issue of Enea SA's securities in 2017 In 2017 Enea Capital Group companies issued securities of the total amount of PLN 740 mln. The nominal debt for the bonds issued by EneaSA as at 30 September 2017 totalled PLN 4,701 mln. Granted sureties and guarantees During Q1-Q3 2017, Enea Group companies did not issue any guarantees or sureties, the total value of which would constitute at least 10% of Enea SA's equity. As at 30 September 2017 the total value of corporate sureties and guarantees granted by Enea SA for hedging the liabilities of Enea Group companies amounted to PLN ,85 thou., and the total value of bank guarantees issued on request of Enea SA and being the security for the liabilities of Enea Group companies amounted to PLN ,5 thou. Interest rate risk hedging transactions Implementing the Interest Rate Risk Management Policy Enea SA did not conclude any transactions in the period of nine months of Enea SA did not conclude transactions which hedge the interest rate risk (Interest Rate Swap). Agreements of significance to Enea Capital Group operations In the period of the first three quarters of 2017 and until the publication of this report, Enea Capital Group companies did not conclude any agreements significant for the Group s operations. Transactions with related parties During January - September 2017 Enea and its subsidiaries did not conclude any transactions with related entities on non-market conditions. Information on transactions with related entities concluded by Enea or its related entity are described in note 21 to the condensed interim consolidated financial statements of Enea Group for the period from 1 January to 30 September Distribution of cash - subsidiaries bond issue programme PLN 3 bln - Bond Issue Programme Agreement of 8 September 2012 Enea Wytwarzanie As at 30 September 2017, Enea Wytwarzanie issued bonds in the said Programme of the total value of PLN 2,091 mln. PLN 1,425 mln - Enea Operator s Bonds The programme fully utilised by Enea Operator. The bonds, depending on the series, bear fixed or floating interest rate. The bonds will be redeemed in instalments from June 2017, and the final redemption date is in June PLN 1 bln - Programme Agreement of 17 February 2015 Enea Wytwarzanie On 17 February 2015, Enea Wytwarzanie, Enea and PKO Bank Polski concluded the Bond Issue Programme Agreement for the amount of PLN 760 mln. On 3 June 2015 an annex was concluded to the agreement based on which the parties increased the amount of the Programme to PLN 1 bln. On 31 March 2017, Enea Wytwarzanie issued bonds in the said Programme of the total value of PLN 1 bln - the programme is fully utilised by Enea Wytwarzanie. PLN 946 mln - Bond Issue Programme Agreement of 7 July 2015 Enea Operator The Executive Bond Issue Programme Agreement for the amount of PLN 946 mln was concluded between Enea as guarantor, Enea Operator as issuer and PKO Bank Polski as agent. Within the agreement, on 28 March 2017 an annex was concluded which extended the availability of funds from the Programme to 29 December The bond redemption date - in instalments, however not later than within 15 years of the date of issue. The bonds may bear the fixed rate or floating rate interest based on WIBOR rate plus margin, with the interest rate revision after 4 or 5 years. As at 30 September 2017, Enea Operator issued bonds in the said Programme of the total value of PLN 450 mln. PLN 740 mln - Bond Issue Programme Agreement of 17 November 2014 Enea Wytwarzanie As at 30 September 2017, Enea Wytwarzanie issued bonds in the said Programme of the total value of PLN 350 mln. The bond redemptionoccurs once and will be conducted in March PLN 260 mln - Programme Agreement of 12 August 2014 Enea Wytwarzanie The programme is fully utilised by Enea Wytwarzanie. The bonds bear a fixed rate interest. The bonds will be redeemedin instalments from September 2017 to December PLN 360 mln - Bond Issue Programme Agreement of 18 July 2016 Enea Operator The Executive Bond Issue Programme Agreement for the amount of PLN 360 mln was concluded between Enea as guarantor, Enea Operator as issuer and PKO Bank Polski as agent. Within the Agreement, Enea Operator may perform a single issue of bonds. On 28 July 2016 Enea Operator issued bonds totalling PLN 360 mln, floating rate - WIBOR 3M plus margin. The redemptiondate of the bonds is December PLN 350 mln - Bond Issue Programme Agreement of 20 September 2017 Enea Operator The Executive Bond Issue Programme Agreement for the amount of PLN 350 mln was concluded between Enea as guarantor, Enea Operator as issuer and PKO Bank Polski as agent. On 28 July 2016 Enea Operator, within the agreement, issued bonds totalling PLN 350 mln, floating rate - WIBOR 3M plus margin. The redemption date of the bonds is December Other agreements In previous years, Enea SA concluded also intergroup bond issue programme agreements with subsidiary companies which are to finance the investments in the segments of RES and Heat. These programmes are fully used and redeemed in instalments. The total amount of the bonds for redemption within these programmes was PLN 83.2 mln as at 30 September

29 MARKET ENVIRONMENT Macroeconomic situation Enea Group s operations are focused on the territory of Poland. The same core macroeconomic factor affecting both achieved results and financial situation is the development pace and the general condition of the Polish economy. According to the estimates of the Central Statistical Office, in the third quarter of 2017, GDP grew actually by 4.7% in comparisonwith the same period of the previous year GDP dynamics [%] IQ IIQ IIIQ IVQ IQ IIQ IIIQ IVQ IQ IIQ IIIQ IVQ IQ IIQ IIIQ IVQ IQ IIQ IIIQ According to GUS [Central Statistical Office] data, growth trends were observed in the main areas of the economy in January-September The production sold in the industry and construction in the third quarter increased annually more than in the second quarter According to GUS estimates, in the period of January - September 2017, the sold production of the industry was by 5.9% higher compared to the same period of the previous year, when the increase was 3.7%. In the third quarter the production growth rate was 6.3% and was faster than in the previous period (when it amounted to 4.2%) but slower than in the first quarter of 2017 (7.3%). In the period from January to September 2017, the construction and assembly production in the country was by 13.0% higher than in the previous year (in the first half of this year the growth was by 7.6%, while in the first three quarters of the previous year - decrease by 14.9%). The prices of consumer goods and services in the period of January - September 2017 growth by 0.9%. In September 2017, the annual growth in prices strengthened and in the third quarter 2017 was slightly faster than in the second quarter of Basic macroeconomic data for the years and for the period of three quarters of 2017 are presented below. Description unit Q1-Q GDP change % Industrial production sold change % Construction and assembly production change % Inflation in % domestic production dynamics [%] Construction and assembly production Industrial production sold I 2016 II 2016 III 2016 IV 2016 V 2016 VI 2016 VII 2016 VIII 2016 IX 2016 X 2016 XI 2016 XII 2016 I 2017 II 2017 III 2017 IV 2017 V 2017 VI 2017 VII 2017 VIII 2017 XI 2017 Source: and development of GUS titled Information on the social and economic situation in Poland Q1-Q

30 MARKET ENVIRONMENT Situation on the electricity market Production of electricity Pursuant to the data published by Polskie Sieci Energetyczne the domestic production of electricity in Q1-Q amounted to 122,637 GWh Electricity generation structure in Polish power plants [GWh] Domestic consumption of electricity Pursuant to the data published by Polskie Sieci Elektroenergetyczne the domestic consumption of electricity in the period from January to September 2017 was higher by 2.41% in relation to the energy consumption in the same period of Source: Domestic production of electricity [GWh] Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Types of power plants Q1-Q Q1-Q Commercial on bituminous coal Commercial on lignite Industrial Gas Commercial hydroelectric Wind Other renewable Intersystemic exchange Domestic consumption of electricity [GWh] Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q In Q1-Q a negative balance of intersystemic exchange was generated as a result of a surplus of energy imported from abroad over the energy exported in the amount of (-) 1,466 GWh. For comparison, in Q1-Q the balance of intersystemic exchange of electricity amounted to (-) 2,857 GWh. January and February 2017 were the only months in which the balance of electrify exchange with aboard was positive. During the other months of March - September 2017 the balance of electricity exchange with abroad was negative Energy exchange with abroad [GWh] Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Serie1 Import Serie2 Export

31 MARKET ENVIRONMENT Coal market prices in Q In the third quarter of 2017, prices of coal in all coal terminals in the world remained in an upward trend. Higher demand in the Asia-Pacific region (China, Taiwan, Japan, South Korea), a significant reduction in the supply on the Atlantic market and the strengthening of the Euro and the currencies of leading exporters against the US dollar, supported coal prices in the world. Spot prices for coal in European ports of ARA, South Africa Richards Bay and Australian Newcastle totalled USD/t in that period. The highest average quarterly rise in coal prices on the level of ca. 7.6% was observed at the ports of Newcastle (+5.1% ARA, + 5.5% RB) due to the high demand for coal imported by Asian customers. The rise in coal prices in Richards Bay was caused by a wave of mining strikes and the redirection of supplies to the demand-driven Asia-Pacific region. In the third quarter of 2017, the average cost of 1 tonne of coal was USD (+15 q/q; + 33% y/y). The increase in coal demand in India due to low inventories at local power plants, strengthened on the other hand US coal prices. Average cost of 1 tonne of the commodity in Q amounted to USD (+10% q/q; + 33% y/y). In ARA ports, price increases derived from limited supply from Colombia and the strengthening of the Euro against the US dollar. On average, in the third quarter of 2017, USD (+ 14% q/q; +44 y/y) was charged per 1 tonne of coal. In the period of Q1-Q3 2017, the PSCMI1 index for the power industry reached the average value ofpln (+ 4.2% yoy), which in USD was USD/t. September 2017 brought about the reversal of price phenomena observed in the period from June to August. This time, the index for the commercial power industry increased and the index for the heating plant decreased. According to PSMCI1 index, monthly prices of coal rose in September by 2.7% to PLN/t. In comparison to the previous year's price, 1 tonne of coal for electricity generation in Poland is currently higher by PLN 9.08 per tonne of coal (+ 4.6%). In Q3 the average PSCMI1 value was PLN/t (-0.6% q/q, + 5.6% y/y). In Q4 2017, it is expected that the increase in coal spot prices on the domestic market will continue due to supply constraints as a result of the suspension or correction of down production levels in Polish mines, a difficult situation on the rail transport market, which results in problems with PKP Cargo delivery, which in turn symmetrically translates negatively into the mining and energy sectors. USD/t Monthly indices of coal prices [USD/t] Polish Steam Coal Market Index - PSCMI [PLN/t] I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII IX I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII IX USD/t Source: own development based on the data from NBP & ARP PLN/t Richards Bay (RPA) (RSA) Newcastle (Australia) Amsterdam-Rotterdam-Antwerpia (ARA) Nowy New Orlean (USA) (USA) Source: own development based on the data from globalcoal & IGSMiE PAN. 31

32 MARKET ENVIRONMENT Wholesale electricity prices The average price on SPOT market in Q1-Q was lower by 2.0% in comparison to the same period of The prices dropped especially in the period from April to June. The prices were affected by the following factors: high capacityin PPE system great utilisation of wind generation relatively mild atmospheric conditions greater export Table 1. Average prices on SPOT market (PPE Day Ahead Market) Period Average price [PLN/MWh] Change [%] Q1-Q Q1-Q % Source: Own paper based on data from PPE. We observed growths in electricity prices on the forward market. In the reporting period the price of BASE Y-18 product grew from PLN/MWh at the beginning of January to PLN/MWh at the end of September. Table 2. Prices on the forwardmarket Product 1) at the end of September 2017 Price at the end of quotations Source: Own development based on data from PPE and TFS. Change yoy Average price from quotations Change yoy [PLN/MWh] [%] [PLN/MWh] [%] BASE Y BASE Y % % BASE Y % % BASE Y-18 1) % % 220 Average electricity prices on Day Ahead Market 80 Transaction prices and volumes - BASE Y PLN/MWh MW PLN/MWh averageweighted średnioważona cena price wolumen trade volume obrotu 130 I II III IV V VI VII VIII IX X XI XII Source: own paper based on data from PPE. Source: own development based on data from PPE and TFS. On TGE forward market a very low liquidity is observed - when comparing turnover in Q1-Q3 of 2016 and 2017 between BASE-Y-17 and BASE Y-18 (it amounts to ca. 12%). The main reason for this situation may be extinguishing of the so-called100% exchange obligation related to Long-term Agreements. 32

33 MARKET ENVIRONMENT The prices of BASE Y-18 changed similarly to PEAK Y-18 prices. At the beginning of January the market valuation for this product amounted to PLN/MWh, and at the end of September 2017 to PLN/MWh. MW In Q1-Q3 2017, the forward market reported a slow growth in electricity prices. It was related to e.g. a great volatility in prices of allowances for emissions of CO 2 (a range between the maximum and minimum EUR/t). What had a great importance for the shaping of the market situation was also a significantly decreased, as compared to the volume of trade in BASE Y-17 in the same period of the previous year, volume of trade in BASE Y-18 on PPE. Some factors of uncertainty still include: the question of the Great Britain s exit from the European Union, which may cause potential changes in the Community Emission Trading Scheme and fluctuations of prices of allowances for emissions of CO 2 (EUA) in a longer term direction of changes in the system and introduction of new solutions (e.g. capacity market) within guaranteeing relevant levels of power in PPS Hence, potential moderate growths in prices cannot be ruled out. Transaction prices and volumes - PEAK Y averageweighted średnioważona cena price Source: own development based on data from PPE and TFS. wolumen trade volume obrotu In Q1-Q3 2017, transactions were also concluded for BASE Y-19, however due to a distant delivery horizon, the trading volumes were significantly lower than for BASE Y PLN/MWh MW Transaction prices and volumes - BASE Y Source: own development based on data from PPE and TFS. średnioważona averageweighted cena price wolumen trade volume obrotu Obligations with respect to obtaining energy certificates of origin In accordance with the regulations being in force energy companies selling electricity to end users in 2017 are obliged to obtain and redeem the following types of certificates of origin: for energy generated in renewable sources, the so called "green" certificates - the obligation on the level of 15.4% of sales to end users for energy generated from agricultural biogas, new certificates under the amendment to the Act on renewable energy sources dated 20 February an obligation on the level of 0.60% of sales to end users for energy generated in methane-fired cogeneration, the so called "violet" certificates the obligation on the level of 1.8% of sales to end users for energy generated in gas cogeneration units or units with the total installed capacity up to 1 MW, the so called "yellow" certificates - the obligation on the level of 7.0% for energy generated in other cogeneration sources, the so called "red" certificates the obligation on the level of 23.2% energy efficiency certificates, the so-called white certificates - the obligation on the level of 1.5% The contracting price structure on the PPE's session market for particular proprietary interests in the period from January to September 2017 is presented on the next page. The analysis excludes PMOZE "green" PIs due to lack of trading volumes and their entire replacement with PMOZE_A PLN/MWh 33

34 MARKET ENVIRONMENT Table 3. Prices on the certificates of origin market (PPE's session market) OZEX_A ("green" proprietary interests) OZEX_BIO ( light blue proprietary interests) KGMX ("yellow" proprietary interests) KECX ("red" proprietary interests) KMETX ("violet" proprietary interests) Average price Q1-Q Change in relation to Q Limits of CO 2 emission allowances and their market prices Maximum price Minimum price % PLN/MWh PLN/MWh PLN/MWh % % % % EFX ("white" proprietary interests) 1) % ) values in PLN/toe Source: own paper based on data from PPE. The end of 2016 characterised with a significant growth in EUA prices. The reason for these growths could be growing prices of coal and energy, high prices obtained at auctions and information on the intention of the Great Britain to remain in the EU ETS system after Brexit. An important growth factor was also the agreement relating to the changes in EU ETS system after 2020 taking into account e.g. withdrawal of 24% instead of 12% of allowances from the market during at least 4 years of MSR operation, redemption of 800 mln allowances withdrawn from the market as part of backloading and increasing the linear reduction coefficient to 2.4% (from 1.74%). After a sudden growth in prices in the second half of December 2016 there was a correction. Lower prices of emissions of CO 2 at the beginning of January 2017 were affected by: a growth in the volume at auctions (blackloading expired, growth of the volume from 3.7 mln to 4.3 mln EUAs) and lower pricesof German energy. The European Commission proposed the continuation of the obligation resulting from greenhouse gas emissions by the air transport until making final decisions as regards the shape of the global market mechanism. On 15 February 2017 during the plenary session in the European Parliament a package of amendments to the draft EU ETS directive was approved which at the end of February were adopted by the Environmental Council. EU member states commenced distribution of free allowances for As results from the most recent data on the number of allowances issued for 2017, published by the European Commission, there are the most not issued allowances in Italy, Romania and the Great Britain and Malta as the only state has already issued all. Pursuant to the April publication of the European Commission the value of verified emissions for 2016 droppedby 2.7% in relationto The EC also published data on the number of surrendered allowances. Almost all installations located in the EU ETS system met the deadline for surrendering emission allowances for In addition, the EC published an update of data on the transfer of free allocations from NER (New Entrant Reserve). Since the beginning of Stage III, i.e. 2013, a total of mln CO 2 emission allowances have been sent to date, of which up to 25.8 mln have been transferred since January A further update will be published in January On 17 August, new, more stringent BAT conclusions were published in the Official Journal of EU, which set higher standards for the emission of nitrogen oxides, sulphur dioxide, mercury and suspended particulates than the current standards in large coal power plants (4 years for adaptation). EUR/t Table4. EUA andcer pricechange Source: own development based on data from ICE Product Beginning of January 2017 Price [EUR/t] The end of September 2017 I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII IX EUA Dec-17 CER Change % EUA Spot % CER Spot % EUA Dec % CER Dec % Source: own development based on data from BlueNext and ICE. EUA and CER quotations - closing prices on SPOT market 34

35 3. Financial position

36 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Consolidated Profit and Loss Statement - Q1-Q [PLN 000] Q1-Q Q1-Q Change Change % Revenue from sale of electricity % Revenue from sale of heat energy 1) % Revenue from sale of natural gas % Revenue from sale of distribution services % Revenue from certificates of origin % Revenue from sales of CO 2 emission allowances % Revenue from sale of goods and materials % Revenue from sale of other services 1) % Sale of coal % Net sales revenue % Amortisation/depreciation % Employee benefit costs % Consumption of materials and raw materials and value of goods sold % Purchase of energy and gas for resale % Transmission services % Other outsourced services % Taxes and charges % Cost of sales % Other operating revenue % Other operating expenses % Profit on sales and liquidation of tangible fixed assets % Non-financial fixed assets impairment write-down % Operating profit % Financial expenses % Financial revenue % Share in profits of affiliated and co-controlled entities Dividend revenue % Profit before taxes % Income tax % Net profit for the reporting period % EBITDA % Q1-Q3 2017: Enea CG s EBITDA change drivers: * The key driver of EBITDA change is the acquisition of Enea Elektrownia Połaniec (as of 14 March 2017) (+) higher revenue from sales of electricity by PLN 237 mln stems mainly from higher volumes of sales by 2,060 GWh with the concurrent drop in the average selling price by 3.9% and greater revenue from the Regulatory System Services (+) higher revenue from sales of heat energy by PLN 38 mln stems from higher volumes of sales by 1,414,181 GJ (mainly as a result of the acquisition of EEP) with the concurrent drop in the average selling price by 20% (-) lower revenue from sales of natural gas by PLN 35 mln stemming from volumes lower by 112 GWh and the price lower by 16.5% (+) higher revenue from the sale of distribution services by PLN 166 mln stemming from a higher volume of sales of distribution services (3%) to end users (+) higher revenue from sale of certificates of origin by PLN 43 mln stems from the settlement of the forward transactions concluded in 2015 (-) lower revenue from the sale of CO 2 emission allowances by PLN 8 mln result mainly from the implementation of fewer contracts with concurrently the higher price of sold CO 2 emission allowances (-) lower sales of coal by PLN 335 mln stem from a higher volume of intergroupdeliveries (-) higher costs of employee benefits by PLN 68 mln resulting mainly from change in employee benefits provisions and EEP acquisition (-) higher costs of materials and value of goods sold by PLN 243 mln stem from the acquisition of EEP with a concurrent drop in costs related to greater volumes of intergroup coal purchases (+) lower costs of purchases of electricity and gas by PLN 722 mln stem from: (+) lower volumes of electricity purchases (2,857 GWh) with concurrent drop in the average purchase price by 4.2% (+) smaller purchase costs of natural gas in relation to the average price lower by 14.3% and volumes lower by 71 GWh (+) lower costs of purchasingpis mainly as a resultof durablelow pricesof green certificates (-) higher costs of transmission services by PLN 154 mln mainly as a result of higher transitory charge and calculationof RES fees (since H2 2016) and higher rate of the fixed transitory charge in PSE tariff (-) higher costs of outsourcedservicesby PLN 96 mln resultingmainly from EEP acquisition (-) higher taxes and charges by PLN 40 mln stem from e.g. the acquisition of EEP and greater value of fixed assets relatedto the finalised investment processes (-) lower results on the other operating activities by PLN 97 mln: (-) higher provisions for latent claims by PLN 93 mln (including PLN 69 mln provision for termination of PIs purchasecontract) (-) lower fixed assets obtained free of charge by PLN 20 mln, e.g. as a result of a smaller number of contractsrelating to collisions on grid assets (-) higher write-downs of the value of overdue receivables and bad debts by PLN 15 mln (-) higher costs of donations by PLN 7 mln (+) profit stemming from a bargain acquisition of ENGIE Energia Polska SA (currently Enea Elektrownia Połaniec SA) amounting to PLN 12 mln (+) lower growth in provisions for non-contractual use of transmission corridors PLN 10 mln (+) higher revenue from damages, fines and contractual penalties by PLN 9 mln (+) smaller loss on the liquidation of tangible assets by PLN 8 mln e.g. as a result of liquidation of excavations 1) Change in presentation of data published for Q1-Q

37 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Consolidated Profit and Loss Statement - Q [PLN 000] Q Q Change Change % Revenue from sale of electricity % Revenue from sale of heat energy 1) % Revenue from sale of natural gas % Revenue from sale of distribution services % Revenue from certificates of origin % Revenue from sales of CO 2 emission allowances % Revenue from sale of goods and materials % Revenue from sale of other services 1) % Sale of coal % Net sales revenue % Amortisation/depreciation % Employee benefit costs % Consumption of materials and raw materials and value of goods sold % Purchase of energy and gas for resale % Transmission services % Other outsourced services % Taxes and charges % Cost of sales % Other operating revenue % Other operating expenses % Profit on sales and liquidation of tangible fixed assets % Non-financial fixed assets impairment write-down % Operating profit % Financial expenses % Financial revenue Share in results of affiliated and co-controlled entities Dividend revenue Profit before taxes % Income tax % Net profit for the reporting period % EBITDA % Q3 2017: Enea CG s EBITDA change drivers: * The key driver of EBITDA change is the acquisition of Enea Elektrownia Połaniec (as of 14 March 2017) (+) higher revenue from sales of electricity by PLN 182 mln stems mainly from higher volumes of sales by 1.3 TWh with the concurrent drop in the average selling price by 4.8% and greater revenue from the Regulatory System Services (+) higher revenue from sales of heat energy by PLN 14 mln stems from higher volumes of sales by 577,626 GJ (mainly as a result of the acquisition of EEP) with the concurrent drop in the average selling price by 51% (-) lower revenue from sales of natural gas by PLN 2 mln stemming from the average selling price lower by 22.7% with the concurrent drop in volumes by 168 GWh (+) higher revenue from the sale of distribution services by PLN 48 mln stemming from a higher volume of sales of distribution services (2%) to end users (+) higher revenue from sale of certificates of origin by PLN 36 mln as a result of the settlement of the forward transactions concluded in 2015 (-) lower sales of coal by PLN 155 mln stem from a higher volume of intergroupdeliveries (-) higher costs of materials and value of goods sold by PLN 240 mln stem from the acquisition of EEP with a concurrent drop in costs related to greater volumes of intergroup coal purchases (+) lower costs of purchases of electricity and gas by PLN 219 mln stem from: (+) lower volumes of electricity purchases (1,158 GWh) with concurrent drop in the average purchase price by 2.4% (+) lower costs of purchasing green certificate PIs (-) higher costs of transmission services by PLN 44 mln stems mainly from higher shifted costs - higher transitory charge and introduction as of 1 July 2016 of a RES fee and higher rate of the fixed transmission fee in PSE tariff (-) higher costs of outsourcedservicesby PLN 30 mln resultingmainly from EEP acquisition (-) higher taxes and charges by PLN 13 mln are connected with e.g. the acquisition of EEP and greater value of fixed assets related to the finalised investment processes (-) lower results on the other operating activities by PLN 47 mln: (-) higher provisions for latent claims by PLN 39 mln (including PLN 25 mln provision for termination of PIs purchasecontract) (-) lower nil-paid fixed assets by PLN 14 mln, e.g. as a result of a smaller number of contracts relating to collisions on the grid assets (-) higher write-downs of the value of overdue receivables and bad debts by PLN 9 mln (+) smaller loss on the liquidation of tangible assets by PLN 6 mln e.g. as a result of liquidation of excavations 1) Change in presentation of data published for Q

38 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Results on individual areas of operations of Enea CG EBITDA [PLN 000] Q1-Q Q1-Q Change Change % Q Q Change Change % Trade % , % Distribution % % Generation % % Mining % , % Other activity % % Undistributed items and exclusions % % Total EBITDA % , % PLN mln Enea CG Q1-Q3 2017: The highest EBITDA in the area of Distribution Trade Distribution Generation Mining Other activity The greatest growth in EBITDA in the area of Generation as a result of higher generation capacity PLN mln Q1-Q Q1-Q Enea CG Q3 2017: The highest EBITDA in the area of Distribution The greatest growth in EBITDA in the area of Generation as a result of higher generation capacity Trade Distribution Generation Mining Other activity Q Q

39 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Area of Trade [PLN 000] Q1-Q Q1-Q Change Change % Q Q Change Change % Sales revenue % % EBIT % % Amortisation/depreciation % % EBITDA % % CAPEX 1) % % Enea SA deals with retail sales of electricity Wholesale is performed by Enea Trading sp. z o.o. Share of sales revenue of the area in the Group's net sales revenue 44% 36% -8 p.p. - 44% 35% -9 p.p. - 1) excluding Enea SA s equity investments PLN mln PLN mln EBITDA Q1-Q Adjusted first contribution margin Internal costs Other factors EBITDA Q1-Q EBITDA Q Adjusted first contribution margin Internal costs Other factors EBITDA Q Q1-Q Change drivers of EBITDA: First contribution margin (-) lower average selling price by 4.5% (+) lower costs of ecologicalobligations by 45.4% (+) lower average purchase price of energy by 8.7% (+) growth in sale volumes by 7.6% (-) lower resulton trade in gas Internal costs (-) higher direct costs of sales by PLN 11 mln (-) higher costs of common services by PLN 5 mln (+) lower general and administrative costs by PLN 3 mln Other drivers (-) higher provisions for latent claims and anticipated losses by PLN 12 mln (-) higher costs of donations PLN 7 mln (-) higher litigation costs by PLN 1 mln (-) higher written-off debts by PLN 2 mln (-) higher impairment of receivables by PLN 4 mln Q Change drivers of EBITDA: First contribution margin (-) lower average selling price by 4.7% (+) lower costs of ecologicalobligations by 35.8% (+) lower average purchase price of energy by 5.6% (+) growth in sale volumes by 6.5% (-) lower resulton trade in gas Internal costs (-) higher direct costs of sales by PLN 4 mln (-) higher costs of common services by PLN 3 mln Other drivers (-) higher provisions for latent claims and anticipated losses by PLN 13 mln (-) higher impairment of receivables by PLN 6 mln 39 39

40 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Area of Generation [PLN 000] Q1-Q Q1-Q Change Change % Q Q Change Change % Sales revenue % % electricity % % certificates of origin % % sale of allowance for emissions of CO % , % heat % % other % % EBIT % % Amortisation/depreciation % % Non-financial fixed assets impairment write-down % EBITDA % % CAPEX % % Share of sales revenue of the area in the Group's net sales revenue 21% 29% 8 p.p. - 20% 31% 11 p.p. - The area of Generation presents financial data of Enea Wytwarzanie sp. z o.o. with its subsidiaries and Enea Połaniec Power Plant. Enea Wytwarzanie holds e.g. 10 highly-efficient and modernised power units in Kozienice Power Plant. As a consequence of the acquisition EEP strengthened the area of Generation with additional 7 coal-fired units with the total gross capacity of 1,657 MW and the largest in the world unit firing exclusively biomass with the installed gross capacity of 225 MW. The annual production capacities in that area amount to ca. 27 TWh electricity, and as a result Enea CG became a vice-leader in electricity generation in Poland. PLN mln EBITDA Q1-Q Segment of System Power Plants Segment of Heat Segment of RES EBITDA Q1-Q Q1-Q Change drivers of EBITDA: Segment of System Power Plants (-) lower margin on trade and the Balancing Market by PLN 46.1 mln (+) higher revenue from Regulatory System Services by PLN 14.4 mln (+) lower fixed costs by PLN 10.0 mln (+) higher margin on generation by PLN 0.8 mln (+) Połaniec Power Plant PLN 82 mln Segment of Heat (+) lower costs of materials by PLN 27.8 mln, including reduced costs of biomass consumption by PLN 51.9 mln and coal by PLN 13.8 mln (+) higher revenuefrom sales of heat by PLN 8.9 mln (+) higher result on the other operating activity by PLN 3.6 mln (-) lower revenue from certificates of origin by PLN 7.5 mln (-) lower revenue from electricity by PLN 11.7 mln (+) Połaniec Power Plant PLN 8.9 mln Segment of RES (+) Area of Water (PLN +6.4 mln): higher revenue from electricity by PLN 6.9 mln, lower revenue from certificates of origin by PLN 1.3 mln (+) Area of Biogas (PLN +3.1 mln): higher revenue from certificates of origin by PLN 2.0 mln, lower variable costs by PLN 0.7 mln, lower fixed costs by PLN 0.3 mln (-) Area of Wind (PLN -4.5 mln): increase of fixed costs by PLN 5.2 mln (greater scope of taxation with property tax - change of regulations), decrease of income from certificates of origin by PLN 3.1 mln, an increase of revenue from electricity by PLN 3.4 mln (+) Połaniec Power Plant PLN 46.3 mln 40

41 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Area of Generation [PLN 000] Q1-Q Q1-Q Change Change % Q Q Change Change % Sales revenue % % electricity % % certificates of origin % % sale of allowance for emissions of CO % % heat % % other % % EBIT % % Amortisation/depreciation % % Non-financial fixed assets impairment write-down % EBITDA % % CAPEX % % Share of sales revenue of the area in the Group's net sales revenue 21% 29% 8 p.p. - 20% 31% 11 p.p. - PLN mln EBITDA Q Segment of System Power Plants Segment of Heat Segment of RES EBITDA Q Q Change drivers of EBITDA: Segment of System Power Plants (-) lower margin on trade by PLN 16.3 mln (-) lower margin on generation by PLN 3.8 mln (-) lower margin on the Balancing Market by PLN 2.2 mln (+) Połaniec Power Plant PLN 30 mln Segment of Heat (+) lower costs of materials by PLN 3.5 mln, including reduced costs of biomass consumption by PLN 19.9 mln and coal by PLN 10.5 mln, higher costs of CO 2 emissions by PLN 5.2 mln (+) lower energypurchasingcosts for resaleby PLN 1.2 mln (+) higher revenuefrom sales of heat by PLN 0.9 mln (-) lower revenue from certificates of origin by PLN 2.8 mln (+) Połaniec Power Plant PLN 3.8 mln Segment of RES (+) Area of Wind (PLN +1.0 mln): increase of revenue from certificates of origin by PLN 1.0 mln, increase in other operating activity by PLN 0.7 mln, increase in revenue from sale of electricity by PLN 1.0 mln, increase of fixed costs by PLN 1.8 mln (property tax) (+) Area of Water (PLN +4.8 mln): higher revenue from sales of electricity by PLN 3.6 mln, fixed costs lower by PLN 0.5 mln, higher revenue from certificates of origin by PLN 0.8 mln (+) Area of Biogas (PLN +1.0 mln): higher revenue from certificates of origin by PLN 0.4 mln, lower costs of use and transport of substrates by PLN 0.5 mln (+) Połaniec Power Plant PLN 28 mln 41

42 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Area of Distribution [PLN 000] Q1-Q Q1-Q Change Change % Q Q Change Change % Sales revenue % % distribution services to end users % % fees for grid connection % % other % % EBIT % % Amortisation/depreciation % % EBITDA % % CAPEX % % Share of sales revenue of the area in the Group's net sales revenue 20% 21% 1 p.p. - 20% 20% - - Enea Operator sp. z o.o. is responsible for electricity distribution to 2.5 mln Customers in the western and north-western Poland on the area of 58.2 thou. km 2. The basic task of Enea Operator is a continuous and reliable supply of energy maintaining appropriate quality parameters. In the area of Distribution the financial data of the following companies is presented: Enea Operator sp. z o.o. Enea Serwis sp. z o.o. Enea Pomiary sp. z o.o. Annacond Enterprises sp. z o. o. PLN mln EBITDA Q1-Q Margin on the licensed operations -1.7 Non-licensed operations Operating expenses Other operating activity EBITDA Q1-Q Q1-Q Change factors of EBITDA: Margin on the licensed operations (+) higher revenue from sale of distribution services to end users by PLN 169 mln (+) lower costs of purchasing energy for coverage of book-tax difference by PLN 16 mln (-) higher costs of purchase of transmission services by PLN 160 mln (-) lower revenue from sale of distribution services to other entities by PLN 7 mln (+) higher other revenue by PLN 1 mln Operating expenses (-) higher employee benefits costs by PLN 24 mln (-) higher costs of outsourced services by PLN 17 mln (-) higher costs of taxes and charges by PLN 13 mln (-) higher other operating expenses by PLN 8 mln Other operating activity: (-) lower revenue from performance of agreements on removal of collisions by PLN 17 mln (-) higher impairment of receivables by PLN 11 mln (+) lower costs of legal provisions relating to grid assets PLN 6 mln (+) higher liquidation result by PLN 3 mln (+) contractual penalties and damages obtained (balance) PLN 3 mln 42

43 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Area of Distribution [PLN 000] Q1-Q Q1-Q Change Change % Q Q Change Change % Sales revenue % % distribution services to end users % % fees for grid connection % % other % % EBIT % % Amortisation/depreciation % % EBITDA % % CAPEX % % Share of sales revenue of the area in the Group's net sales revenue 20% 21% 1 p.p. - 20% 20% - - PLN mln EBITDA Q Margin on the licensed operations 0.2 Non-licensed operations Operating expenses 2.9 Other operating activity EBITDA Q Q Change factors of EBITDA: Margin on the licensed operations (+) higher revenue from sale of distribution services to end users by PLN 45 mln (+) lower costs of purchasing energy for coverage of book-tax difference by PLN 5 mln (+) higher revenue from connection fees by PLN 2 mln (-) higher costs of purchase of transmission services by PLN 46 mln (-) lower revenue from sale of distribution services to other entities by PLN 2 mln (+) higher other revenue by PLN 1 mln Operating expenses (-) higher costs of outsourced services by PLN 5 mln (-) higher employee benefits costs by PLN 3 mln (-) higher costs of taxes and charges by PLN 3 mln (-) higher other operating expenses by PLN 3 mln Other operating activity: (-) higher result on insurance and fortuitous events by PLN 3 mln 43

44 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Area of Mining [PLN 000] Q1-Q Q1-Q Change Change % Q Q Change Change % Sales revenue % % coal % % other products and services % % goods and materials % % EBIT % % Amortisation/depreciation % % The area of Mining includes the financial results of LW Bogdanka CG with its parent - Lubelski Węgiel Bogdanka SA and its subsidiaries. LW Bogdanka s range of products includes energetic fine coal which accounts fro 99%, and peas and nut coal. Major recipients include commercial and industrial power industry. EBITDA % % CAPEX % % Share of sales revenue of the area in the Group's net sales revenue 11% 11% % 10% - 2 p.p. - PLN mln EBITDA Area of Segment Wwydobycie Mining I-IIIQ 2016 EBITDA Q1-Q Różnice EBITDA GK LWB Ilość sprzedanego Presentation LWB CG s Volume prezentacyjne I-IIIQ 2016 węgla* 1) of między differences układami EBITDA Q1-Q Cena węgla 40.7 Jednostkowy koszt goods sprzed. solds produktów excl. towar. i mater. depreciation bez amortyzacji coal sold 1) Coal price Unit costs of -5.5 Koszty sprzedaży Selling and i administracyjne administration costs Wynik na pozostałej działalności operacyjnej Result on the other operating activity EBITDA GK LWB LWB CG s I-IIIQ 2017 Różnice prezentacyjne między differences układami Presentation EBITDA Q1-Q EBITDA Area of Segment Wydobycie Mining I-IIIQ 2017 EBITDA Q1-Q Q1-Q Factors of generated EBITDA: (+) EBITDA profitability 34.5% Q1-Q against 33.3% for Q1-Q (-) drop of revenue from coal sales: lower sales volume (-41 thou. t) at slightly lower price (-) decrease of revenue from sales of other products and services realised beyond LW Bogdanka CG by subsidiary companies (+) drop in the unit cost of sold products, goods and materials excluding amortisation - better cost efficiency with a decreasing volume of coal sold (-41 thou. t) (-) higher administrative expenses and selling costs: selling costs - customs and logistic handling costs of coal sold to Ukraine administrative expenses - higher amortisation and depreciation, payments to the State Fund of Rehabilitation of Handicapped People, property tax; managerial options were derecognised (-) lower result on the other operating activity release of the provision for damages for Budimex due to a favourable ruling of the Court of Appeal (-) presentation differences relating to the financial reporting of Enea CG and LW Bogdanka CG relating to amortisation and depreciation 1) Aggregate impact on revenue and expenses 44 44

45 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Area of Mining [PLN 000] Q1-Q Q1-Q Change Change % Q Q Change Change % Sales revenue % % coal % % other products and services % % goods and materials % % EBIT % % Amortisation/depreciation % % EBITDA % % CAPEX % % Share of sales revenue of the area in the Group's net sales revenue 11% 11% % 10% - 2 p.p. - PLN mln EBITDA Różnice EBITDA GK LWB Area of Presentation LWB CG s Segment prezentacyjne IIIQ 2016 Wwydobycie Mining IIIQ między differences układami EBITDA EBITDA 2016 Q Q ) Aggregate 1) Aggregate impact impact on on revenue revenue and and expenses expenses Ilość Cena węgla Jednostkowy Koszty sprzedaży Wynik na Volume of Coal price Unit costs of Selling and Result on sprzedanego koszt i pozostałej coal węgla* sold 1) goods sprzed. solds administracyjne administration and działalności the other 1) produktów excl. administrative costs operacyjnej operating towar. depreciation i mater. activity bez amortyzacji EBITDA GK LWB Różnice LWB CG s Presentation IIIQ 2017 prezentacyjne EBITDA między differences układami Q EBITDA Area of Segment Wydobycie Mining IIIQ EBITDA 2017 Q Q Factors of generated EBITDA: (+) EBITDA profitability 32.1% Q against 33.1% for Q (-) drop of revenue from coal sales: lower sales volume (-324 thou. t) at higher price (-) decrease of revenue from sales of other products and services realised beyond LW Bogdanka CG by subsidiary companies (-) growth in the unit cost of sold products, goods and materials excluding amortisation - constant cost control with a considerably decreasing volume of coalsold (-324 thou. t) (+) lower selling costs and administrative expenses: selling costs - lower costs of advertising and sponsorship (a different payment schedule), lower repair services relating to railwaycarriages administrative expenses - positive balance of provisions (-) presentation differences relating to the financial reporting of Enea CG and LW Bogdanka CG relating to amortisation and depreciation 45 45

46 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Area of Other activity [PLN 000] Q1-Q Q1-Q Change Change % Q Q Change Change % Sales revenue % % EBIT % Amortisation/depreciation % % EBITDA % % CAPEX % % Share of sales revenue of the area in the Group's net sales revenue 3% 4% 1 p.p. - 3% 4% 1 p.p. - The area of the Other Activity includes companies from the following areas: support for the other Group companies: Enea Centrum sp. z o.o. - being the Shared Service Centre in the Group within accounting, staff, teleinformation, customer service Enea Logistyka sp. z o.o. - the company specialising in the logistics, warehousing, supply operations supplementary operations: Enea Oświetlenie sp. z o.o. - the company specialising in lighting the interior and exterior of buildings; designs, constructs street lighting, illumination of urban areas, lighting monumental buildings and public utility objects, and also rendering construction services and comprehensive servicing of photovoltaic power plants 46

47 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Assets - structure of assets and liabilities of Enea Capital Group Assets [PLN 000] 31 December 2016 As at: 30 September 2017 Change Change % Fixed assets % PLN mln Structure of tangible assets 42.9% 41.0% 42.4% 45.5% Distribution Tangible fixed assets % Perpetual usufruct % Intangible assets % % 13.9% Generation Mining Investment properties % Investments in subsidiaries, joint subsidiaries and co-controlled entities % Deferred tax assets % 0 As at 31 December 2016 As at 30 September 2017 Financial assets available for sale % Financial assets valued at fair value through profit or loss % Derivatives % Trade and other receivables % Funds gathered within Mine Liquidation Fund % Current assets % Allowances for emissions of CO % Inventories % Trade and other receivables % Current income tax assets % Financial assets held to maturity % Fixed assets change drivers (growth PLN 1,921 mln): growth in tangible assets by PLN stems mainly from the acquisition of EEP s assets and acceptance of subsequent stages of the unit 11 construction higher investments in subsidiaries by PLN 355 mln stem from the subscription for new shares in the raised share capital of Polska Grupa Górnicza sp. z o.o., the acquisition of shares in Polimex-Mostostal SA and Elektrownia Ostrołęka SA higher financial assets valued at fair value through financial result by PLN 39 mln relate to the valuation of purchase option of shares in Polimex-Mostostal SA Change drivers of currentassets (drop by PLN 702 mln): lower value of allowances to CO 2 emissions by PLN 299 mln as a result of redeeming the allowances for the preceding year higher inventories by PLN 269 mln stem from the acquisition of EEP s assets (growth by inventories of coal, biomass and certificates of origin) lower cash and cash equivalents by PLN 661 mln stem from the realised payments relating to the accomplished acquisition procedures and implementation of investment tasks Financial assets valued at fair value through profit or loss % Cash and cash equivalents % Fixed assets for sale % Total assets % 47

48 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Assets - structure of assets and liabilities of Enea Capital Group Liabilities [PLN 000] As at: 31 December September 2017 Change Change % Total equity % Share capital Share premium Financial instruments revaluation reserve % Other reserves % Reserve capital from valuation of hedging instruments % Retained earnings % Non-controlling interests % Total liabilities % Non-current liabilities % Current liabilities % Total equity and liabilities % Structure of non-current liabilities Structure of current liabilities Credits, loans and debt securities Trade and services and other liabilities Settlement of income from subsidies and connections Credits, loans and debt securities Employee benefit liabilities Employee benefit liabilities Provisions for other liabilities and charges Provisions for other liabilities and charges Other Other As at 31 December 2016 As at 30 September 2017 Change factors of non-current liabilities (growth by PLN 369 mln) PLN 191 mln growth in credits, loans and debt securities - stems mainly from the disbursement of another tranche of a loan in EIB for the financing of a multiannual investment plan in order to modernise and extend the power grids of Enea Operator, issue of new bonds within the Programme Agreement up to PLN 700 mln and new bonds within the Programme Agreement up to PLN 3,000 mln. Moreover, during the reporting period, LW Bogdanka's redemption of bonds and repayment of EIB loan instalments and the "Programem Agreement up to PLN 700 mln PLN 73 mln increase in employee benefit liabilities results mainly from updating of actuarial assumptions PLN 28 mln increase in provisions for other liabilities and other charges results mainly from provisions for property tax (investments in grid assets) and latent claims PLN 83 mln growth in trade and other liabilities As at 31 December 2016 As at 30 September 2017 Change factors of current liabilities (growth by PLN 176 mln): PLN 112 mln growth in provisions for other liabilities and other provisions - change in the balance of provision relating to allowances for emissions of CO 2 PLN 85 mln growth in trade and other liabilities 48

49 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Cash situation of Enea Capital Group Cash flow statement [PLN '000] Q1-Q Q1-Q Change Change % Net cash flows from operating activities % Net cash flows from investing activities % Net cash flows from financing activities % Net increase / (decrease) in cash and cash equivalents % Opening balance of cash and cash equivalents % Closing balance of cash and cash equivalents % PLN mln Cash flows for Q1-Q PLN mln CAPEX 1) Enea CG Q1-Q Gotówka Cash 1 1 January stycznia Zysk Net profit netto Amortisation/ Amortyzacja Working Kapitał depreciation obrotowy capital Finansowanie External zewnętrzne financing 1) CAPEX 1) Redemption Wykup of obligacji bonds Pozostałe Other Gotówka Cash September września Generation Distribution Mining Other Equity investments 1) Acquisition of tangible and intangible assets and acquisition of subsidiaries, affiliates and jointly controlled entities adjusted with obtained cash 49

50 ENEA CG'S FINANCIAL RESULTS IN Q1-Q AND Q Ratio analysis 1) Profitability ratios Principles of preparation of financial statements Q1-Q Q1-Q Q Q ROE - return on equity 7.5% 8.2% 7.8% 6.3% ROA - return on assets 4.1% 4.3% 4.2% 3.3% Net profitability 8.7% 10.0% 9.2% 7.6% Operating profitability 11.4% 12.7% 12.5% 10.2% EBITDA profitability 22.0% 23.2% 23.0% 20.8% Liquidity and financial structure ratios Current ratio Equity-to-fixed assets ratio 67.6% 63.9% 67.6% 63.9% Total debt ratio 45.7% 46.9% 45.7% 46.9% Net debt / EBITDA Economic activity ratios Current receivables turnover in days Turnover of trade and other payables in days Inventory turnover in days Condensed financial statements of Enea SA and Enea Group, respectively, included in the extended consolidated report of Enea SA for the reporting period were prepared in accordance with International Accounting Standards and International Financial Reporting Standards (IAS/IFRS) approved by the European Union. Condensed financial statements were prepared with an assumption of going concern in the foreseeable future. The Company's Management Board states, as at the execution date of the condensed financial statements, no facts or circumstances that could indicate any threats to the possibility of continuing the activity during the period of 12 months after the balance sheet date as a result of a wilful or mandatory negligence or substantial limitation of the so far activities. Financial data presented in the statements, if not stated otherwise, was presentedin thousands of PLN. Anticipated financial position In the first three quarters of 2017, LW Bogdanka CG generated excellent financial results as compared to the same period of the previous year. There are two main priorities for this area: maintaining the unit cost of extraction at the current level and maintaining the investment processes at the level ensuring the realisation of the anticipated sales plans. The stability of the results of the area of Mining is positively affected by the incorporation of Połaniec Power Plant under Enea CG and the acquisition of a mining license on the new "Ostrów" field, which has increased the recoverable reserve of LW Bogdanka and allows us to think about the development of this area in the perspective of not 25 but 50 years. The area of Generation, which during the three quarters of 2017 accounted for 31% EBITDA of Enea CG, remains unchangeably under the influence of the demanding energy market situation. The production concentrated on bituminous coal involves the exposure to risk related to carbon dioxide emission costs. Extensive repairs of generating units planned in are still important for the results generated by the area of Generation, and they will force relatively long periods of electricity generation suspension. Less production of current generation assets will be compensated by Unit 11, which will be put into operation in December 2017, and by an optimum use of the production capacity of two power generation sources, which remain Kozienice Power Plant and Połaniec Power Plant. The area of Distribution, which accounted for 41% of Enea CG's EBITDA in January-September 2017, remains unchangeably the area stabilising the cash flows. The basic elements affecting the results of this area are still: a drop in the average weighted cost of capital (WACC) % in 2015, 5.675% in 2016, 5.633% in 2017 and introduction by ERO as of 2016 of the so-called quality tariff. Q proved to be a real challenge for distribution network operators in Poland. Incredibly strong weather events have had a tremendous impact on the SAIDI and SAIFI ratios, which may significantly reduce the level of EBITDA in the Distribution area in In order to ensure the value of the benchmarks set by the Energy Regulatory Office, Enea CG is consistently investing in the grid improving safety andstability of power supply. In the area of Trade the operations focus on increasing sales of electricity and gas - due to an attractive product range new Customers are obtained, and the volume of sold energy and gas increases. An increasing competition on the market putting pressure on the realised selling prices has a negative impact on the Trade area s financial results. The better yoy results of the area of Trade (as in the preceding period of 2017) are mostly affected by the effects of the termination of long-term contracts for the purchase of green property interests. Possible risks related to the impact of ongoing disputes with green energy generators on the performanceof subsequent periods are mitigated by establishing a provision for latent claims. Despite difficult market and regulatory conditions, due to the consistent growth in the Group s value, searching for synergies among its business areas, Enea CG generates financial results on the anticipated level and the Group s liquidity position is safe. The Group's financial standing remains safe, e.g. due to a considerably great volume of cash, which as at the end of September 2017, including current financial assets kept to maturity and financial assets evaluated at fair value through result, amounted to ca. PLN bln. Due to cost discipline, constant search for cost optimisation and proper use of resources, the Group beneficially provides the investment financing from its own resourcesas well as from fundinginstitutions. With improved performance, secure cash position and availability of financing, Enea Group is consistently implementing a vast CAPEX (capital expenditures) programme, covering primarily the area of Generation and the distribution network. Financial results forecasts The Management Board of Enea SA did not publish any financial forecasts for ) Ration definitionsare to be found on page 78 50

51 4. Shares and shareholding

52 SHAREHLDING STRUCTURE AND PRICES Share capital structure Enea SA's share capital as at the publication date of this report for Q amounts to PLN 441,442,578 and is divided into 441,442,578 ordinary bearer shares of the nominal value of PLN 1 each. A total number of votes resulting from all the issued shares of the Issuer corresponds to the number of shares and amounts to 441,442,578 votes. Shareholding structure All the Company's shares are dematerialised bearer shares registered with the National Depositary for Securities. The table below presents Enea SA's shareholding structure as at the publication date of the periodic report for Q3 2017, i.e. 23 November Shareholder Number of shares /number of votes during GM From the publication of the previous quarterly report, i.e. 25 May 2017, the single change in the shareholding structure related to the decrease in the share of the funds managed by TFI PZU SA below the threshold of 10% of the total number of votes in the Company. Detailed information within this scope were published in the current report No. 25/2017 of 27 June Prices of Enea SA's shares on the Warsaw Stock Exchange Share in the share capital /share in the total number of votes State Treasury % PZU TFI % Others % TOTAL 441, % Enea SA s shares have been listed on the Warsaw Stock Exchange (WSE) since 17 November The share of the Company s shares in indices as at 30 September In the period from 1 January to 30 September 2017 the price of Enea's shares grew from PLN 9.60 to PLN 14.80, i.e. by PLN 5.20 or 54.2%. The highest price in the period was achieved for Enea s shares on 28 August, and the lowest - on 23 January % Prices of Enea's shares in I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII IX trading volume [thou.] share price [PLN] Change in the price of Enea SA's shares in relation to the changes of WIG30 and WIG-Energy indices 18,00 17,00 16,00 15,00 14,00 13,00 12,00 11,00 10,00 9,00 8,00 45% 1.30% 3.84% 14.23% 0.94% The table below demonstrates data relating to the Company's shares in Q1-Q Data Q1-Q Number of shares[pcs] Minimum [PLN] 9.48 Maximum [PLN Closing price [PLN] Opening price [PLN] 9.60 Average volume [pcs] % 25% 15% 5% -5% -15% -25% Enea WIG-Energy WIG30 52

53 5. Authorities

54 AUTHORITIES Personal composition of Enea SA's Management Board From the beginning of 2017 the composition of the Management Board has been as follows: Mirosław Kowalik - President of the Management Board, Wiesław Piosik - Vice-President of the Management Board for Corporate Affairs, Piotr Adamczak - Vice-President of the Management Board for Commercial Affairs and Mikołaj Franzkowiak - Vice-President of the Management Board for Financial Affairs. On 24 August the Company s Supervisory Board adopted resolutions regarding the dismissal from Enea SA s Management Board of Wiesław Piosik, i.e. the Vice-President for Corporate Affairs, and of Mikołaj Franzkowiack i.e. the Vice-President for Financial Affairs. At the same time the Supervisory Board delegated on the same date the Member of the Supervisory Board, Rafał Szymański, to temporarily serve as the Vice-President of the Management Board for Corporate Affairs of Enea SA for the period not exceeding three months until a new Member of the Management Board for Corporate Affairs in Enea SA is nominated. On 22 September the Company s Supervisory Board adopted a resolution concerning nomination as of 1 October 2017 of Piotr Olejniczak to the position of the Member of the Management Board for Financial Affairs and on 5 October a resolution concerning nomination as of 10 October 2017 of Zbigniew Piętka to the position of the Member of the Management Board for Corporate Affairs. Mirosław Kowalik President of the Management Board Mirosław Kowalik has been connected with the power industry for over 20 years, holding managerial positions on an operating and strategic level. In 2015 he managed SNC Lavalin sp. z o.o. Polska as the Vice-President of the Board and Business Development Director. During he worked on various managerial positions for ALSTOM Power, recently as the Marketing and Sales Director. Connected with ABB corporationduring Mirosław Kowalik is a graduate of the Faculty of Energy Engineering of the Gdynia Maritime University. He graduated from MBA (Rotterdam School of Management programme in cooperation with the University of Gdańsk and Gdańsk Foundation for Management Development) achieving the degree of Executive Master of Business Administration. He is also a graduate of postgraduate studies of Corporate Finance Management at the Warsaw School of Economics. Currently, he is undergoing a PhD study - Executive Doctor of Business Administration in the Polish Academy of Sciences, Institute of Economics. Scope of competence: Coordination of tasks related to the overall operations of the Company and Enea Capital Group. Zbigniew Piętka Vice-President of the Management Board for Corporate Affairs Involved in the energy industry for almost 40 years. From 2016 he was the Deputy Director of the Maritime Office in Szczecin for technical issues. During he worked as an electro automation officer in Polska Żegluga Morska, with which he was also associated at the beginning of his career in In he was Vice-President of Enea for Infrastructure. He also gained managerialexperiencein Zarząd Morskich Portów Szczecin-Świnoujście, where he was the Head of the Energy Department - Chief Power Officer in Zbigniew Piętka is a graduate of the Faculty of Electrical Engineering of Szczecin University of Technology. He also completed postgraduate studies at the Warsaw University of Technology in the field of energy enterprise management in the conditions of energy market development. Scope of competence: Supervision and coordination of all the notions related to the Corporate Governance, ownership supervision, services in Enea Capital Group. Piotr Adamczak Vice-President of the Management Board for Commercial Affairs Piotr Adamczak has been connected with the power industry for over 20 years. He commenced his professional career in Zakład Energetyczny Poznań. He managed the Market Organisation Department in EnergoPartner Wielkopolska. During he worked in Energetyka Poznańska, and after the consolidation in Grupa Energetyczna Enea SA, on the positions of the Office Manager, Division Manager and Department Director, he dealt with the centralisation and realisation of tasks within the wholesale trade in electricity, duties of a commercial and technical coordinator, commercial coordinator, and commercial cooperation with RES as well. From 2011 he worked on the position of the Office Manager and from 2013 Trading Department Director in Enea Trading where he dealt with commercial activities on electricity markets, proprietary interests to certificates of origin, emission allowances and commercial cooperation with RES for the account of Enea Group companies. Piotr Adamczak is a graduate of the Poznań University of Technology, majoring in Electrical Engineering at the Faculty of Electrical Engineering. He also graduated from Postgraduate Studies in Economic Problems of Power Sector Transformation at the Warsaw School of Economics, and the postgraduate study in Electricity trade management at the Poznań Trade and Commerce College. Scope of competence: Supervision and coordination of the overall tasks related to the trading activity and Customer service. Piotr Olejniczak Vice-President of the Management Board for Financial Affairs Piotr Olejniczak has been involved in corporate finance since the beginning of his career. He holds over 20 years of experience in leading consulting companies, where he held managerial positions. Since 2015 he has run his own business, including consulting. Earlier in , he was the director of the Capital Markets Department at IPOPEMA Securities. He worked for KPMG Advisory as a manager and deputy director in Corporate Finance for seven years. Piotr Olejniczak was associated with BRE Corporate Finance during , where he was promoted from Senior Consultant to Area Manager. He started his career at Doradca Consultants Ltd. as a junior consultant in the Department of Financial Consulting. Piotr Olejniczak is a graduate of the Faculty of Economics at the University of Gdańsk. He also, as part of his scholarship, studied finance and German at FHTW Berlin (now Hochschule für Wirtschaft und Recht Berlin) and at Johann Wolfgang Goethe University in Frankfurt am Main. He also completed postgraduate studies at the University of Warsaw within corporate law and capital market law. He participated in numerous trainings on mergers and acquisitions. Scope of competence: Supervision and coordination of economic, financial and accounting affairs related to risk management in the Company and Enea Capital Group, teleinformation and controlling. Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 54

55 AUTHORITIES Personal composition of Enea SA' Supervisory Board During 2017 no changes occurred in the composition of the Company s Supervisory Board. As at the date of publication of this report, i.e. 23 November 2017, the Supervisory Board of the Company of the 9th term is composed of ten members and operates in the following composition: Małgorzata Niezgoda, Chairman of the Supervisory Board Date of appointment: 2 July 2015 Małgorzata Niezgoda currently works as the Director of the Supervision Department in the Ministry of Energy. She has held various positions since 2008 in the departments dealing with ownership supervision over the State Treasury owned enterprises in the Ministry of Treasury. In the period from November 2014 to February 2015 she was the Director of the Mining Department of the Ministry of Economy. In this period the bituminous coalmining restructuringprocesswas prepared. Małgorzata Niezgoda holds a higher qualification, she graduated from the Warsaw University of Life Sciences SGGW on the faculty of Environmental Engineering Piotr Kossak, Vice-Chairman of the Supervisory Board Date of appointment: 15 January 2016 Piotr Kossak runs a legal practice in his own Law Firm of the Legal Counsel in Sandomierz specialising in reprivatisation issues, foundation and association law and companies law. During he was connected with the University of Human and Life Sciences in Sandomierz - as a research associate and dean on the Faculty of Law and Administration. Piotr Kossak is a PhD of legal sciences within law. He received this degree at the Faculty of Law, Canon Law and Administration of John Paul II Catholic University of Lublin (KUL) in Lublin. He completed the legal training by the District Chamber of Legal Advisers in Kraków and barrister s training by the District Bar Council in Kielce. In 2006 he was entered into the list of legal counsels in the District Chamber of Legal Advisers in Kraków, and in 2009 he was entered into the list of barristers of the District Bar Council in Kielce. Piotr Kossak satisfies the independencecriteria for members of the Supervisory Board. Rafał Szymański, Secretary of the Supervisory Board Date of appointment: 2 July 2015 Rafał Szymański is an employee of the Ministry of Energy in the Supervision Department. His professional duties include e.g. ownership supervision of State Treasury companies. So far, he has been employed in the Ministry of Treasury, where he held e.g. the position of the Head of the Department supervising the power sector companiesowned by the State Treasury. Rafał Szymański graduated from the University of Warmia and Mazury majoring in the Ecological Engineering and from Post-graduate Studies of Energy Market Operation at the Warsaw School of Economics. On 24 August 2017 delegated to temporarily serve as the Member of the Management Board for Corporate Affairs of Enea SA for the period not exceeding three months until a new Member of the Management Board for Corporate Affairs of EneaSA is nominated. Wojciech Klimowicz, Member of the Supervisory Board Date of appointment: 2 July 2015 Wojciech Klimowicz has been connected with Enea SA since 2003 and currently works in the Sales Department Mr. Wojciech Klimowicz graduated from MA studies at Adam Mickiewicz University in Poznań, Faculty of Social Sciences, majoring in Politology (specialisation: local government administration). He also graduated from Postgraduate studies: Data statistical analysis in administration and business at the Faculty of Economics of the Poznań University of Economics and Business. Tadeusz Mikłosz, Member of the Supervisory Board Date of appointment: 2 July 2015 Tadeusz Mikłosz holds long professional experience in the area of power engineering and ownership supervision. Since 1983 he has been connected with Enea SA and its predecessor entity, and currently he is an employee of the Operating Management Department. He has sat in various Supervisory Boards since Tadeusz Mikłosz holds a higher qualification in team leadership and political science. He also graduated from Post-graduate Studies in commercial law at Poznań University of Economics. Sławomir Brzeziński, Member of the Supervisory Board Date of appointment: 2 July 2015 Sławomir Brzeziński has been connected with Enea SA since Currently, he is holding the position of the Organisation and Safety Department Director. Previously he was related to the International Fair of Poznań. Sławomir Brzeziński is a graduate of the Poznan University of Technology, Faculty of Machine Construction and Management and the University of Gdansk, Faculty of Law and Administration. He also graduated from post-graduate studies at Poznań University of Economics within logistics and supply chain management and Poznań University of Technology majoring in quality management. Roman Stryjski, Member of the Supervisory Board Date of appointment: 15 January 2016 Roman Stryjski is a professor of the University of Zielona Góra, Director of the Institute of Computer Science and Production Management. Formerly, he was professionally connected with the Higher Engineering School in Zielona Góra and the Pedagogical University in Zielona Góra for many years. Member of international scientific societies and advisory committees, the Polish Association for Energy Certification and the Organisation and Management SciencesCommittee of the Polish Academy of SciencesBranch in Poznań. Roman Stryjski is a habilitated doctor of technical sciencesof Martin Luther University Halle-Wittenberg. Piotr Mirkowski, Member of the Supervisory Board Date of appointment: 15 January 2016 During , Piotr Mirkowski was a member of the Supervisory Board of the joint stock company Radpec SA. In he was connected with RTBS Administrator sp. z o.o. From 1998 to 1999 he was employed in Zakład Usług Technicznych Energetyki Cieplnej in Radom on the position of an Operations Director. During he worked as the Heat Networks Department Manager in Wojewódzkie Przedsiębiorstwo Energetyki Cieplnej in Radom. Piotr Mirkowski is a graduate of the Radom School of Engineering, speciality: mechanical engineering. He also graduated from the postgraduate studies at the Warsaw University of Technology within heating and heating with energy auditing. He holds ISO auditor and ISO plenipotentiary certificates. Rafał Bargiel, Member of the Supervisory Board Date of appointment: 15 January 2016 Rafał Bargiel currently runs his own office of a legal counsel which renders comprehensive legal services for individual and corporate clients. From 1 September 2017 has been pursuing the profession of a legal counsel in the Office of Rafał Bargiel, Legal Counsel in Bielsko-Biała. Formerly, he ran his own office of a legal counsel. Rafał Bargiel obtained his Master s degree at the University of Silesia in Katowice at the Faculty of Law and Administration. He completed a barrister training by the District Bar Council of Bielsko-Biała. Paweł Skopiński, Member of the Supervisory Board Date of appointment: 5 September 2016 Paweł Skopiński is a legal counsel in the Ministry of Energy. Connected with the Legal Department in the Ministry of Treasury since During he was a Legal Counsel in the Legal and Litigation Department of the Minister of Treasury. Previously, he cooperated with renowned law firms on preparation of legal opinions. Paweł Skopiński graduated from the University of Warsaw, Faculty of Law and Administration in Warsaw. In 2009 he obtained the professional title of a Legal Counsel and was entered into the list of legal counsels of the District Chamber of Legal Advisers in Warsaw. Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 55

56 AUTHORITIES In relation to the nomination of the Supervisory Board of the 9 th term the Audit Committee and Nominations and Remuneration Committee were appointed. As at the date of publication of the report the composition of the above mentioned committees was as follows: Audit Committee Name Piotr Kossak 1) Position Chairman List of shares and allotment certificates to shares of Enea SA held by members of the Management and Supervisory Boards Name Tadeusz Mikłosz Position Member of the Supervisory Board Number of Enea SA s shares as at 25 May 2017 Number of Enea SA s shares as at 23 November Małgorzata Niezgoda Member Roman Stryjski 2) Member Piotr Mirkowski 2) Member Rafał Bargiel 2) Member Sławomir Brzeziński Member Wojciech Klimowicz Member Nominations and Remuneration Committee Name Rafał Szymański Piotr Kossak 1) Rafał Bargiel 2) Piotr Mirkowski 2) Tadeusz Mikłosz Paweł Skopiński Position Chairman Member Member Member Member Member 1) An independent member under Article 129 item 1(3) of the Act of 11 May 2017 on chartered accountants, auditing companies and public supervision and under the principles of corporate governance included in the set of Best Practices of WSE listed Companies ) Independent member under Article 129 item 1(3) of the Act of 11 May 2017 on chartered accountants, auditing companies and public supervision Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 56

57 6. Other information significant for the assessment of the Issuer's situation

58 EVENTS THAT MAY AFFECT FUTURE RESULTS Demand for energy According to the forecast included in Update of the projection of demand for fuels and energy until 2030 the demand for electricity during the coming years will grow in all the sectors of the economy. According to the above document the net electricity production will grow to TWh in At the same time, pursuant to the document titled Conclusions from forecast analyses for the needs of the Energy Policy of Poland until 2050 until 2050 the production of electricity will increase by ca. 40% - from 158 TWh in 2010 to 223 TWh in ) Exemption form the obligation to tariff households Pursuant to Article 49 of the Energy law, the President of ERO may exempt an energy company from the obligation of submitting tariffs for approval, if he states that it operates competitively. A potential exemption from tariffing may positively affect the margin on sales of energy. Significanttrends in the area of Distribution New technologies appearing, growing Customer expectations and a dynamically changing economic environment in Poland and in the world anticipate changes in the way ODSs operate, they in particular draw attention to the necessity of implementing solutions which are innovative in the area of distribution, leading to the modernisation and extension of the distribution network allowing for absorption of leading trends in the power engineering sector. The key trends are related to: development and implementation of smart grids development and implementation of modern IT systems supporting the network management occurring new institutional and technical solutions such as clusters, energy cooperatives, prosumer market, energy warehouses, electromobility Quality tariff The new model of the quality regulation came into force on 1 January 2016, yet it will have impact on the finances of Enea Operator (and other ODSs) as late as in The President of the Energy Regulatory Office made some portion of the regulated income dependant on the quality of services rendered by these entities. Service quality assessment will be performed by measuring numerous ratios, in particular of uninterrupted power supply and time of connecting to the power grid. Growth in the number of energy sellers The number of electricity sellers grows regularly. Appearing of a seller conducting an aggressive price policy may result in the pressure on the margin on sales of energy to retail consumers. Additionally, it must be noted that more and more customers decide to change their energy seller. The number of TPA recipients (Third Party Access) among enterprises (tariff group sets A, B, C) as at the end of September 2017 amounted to 186,118, thus grew from the end of December 2016 by 12,260 (7.1%). And among households (tariff group set G) the TPA principle was used, as at the end of September 2017, by 529,023 customers, which means a growth by 66,393 (14.4%) in relation to the end of December ) Continuation of the cooperation on the construction of the first atomic power plant in Poland On 3 September 2014, PGE Polska Grupa Energetyczna, Tauron Polska Energia, Enea and KGHM Polska Miedź (Business Partners) concluded a Shareholder Agreement. On 15 April 2015, pursuant to the Shareholder Agreement, an agreement on sale of shares in PGE EJ 1 Sp. z o.o. was concluded, as a result of which each of the Business Partners acquired 10% of shares in PGE EJ 1. As a consequence of disposal by PGE Polska Grupa Energetyczna to the Business Partners of shares in PGE EJ 1, PGE Polska Grupa Energetyczna holds 70% in the share capital of PGE EJ 1, and the other Business Partners (Tauron Polska Energia, Enea and KGHM Polska Miedź) 30%, i.e. 10% each. As anticipated, PGE Polska Grupa Energetyczna is the leader of the construction project and exploitation of the first Polish atomic power plant, and PGE EJ 1 is to be a future operator of the power plant. Pursuant to the Shareholder Agreement, the Parties jointly undertake, in the proportion to number of shares held, to finance the operations as part of the preliminary stage of the Project (Development Stage). Enea s financial engagement at the Development stage will not exceed the amount of ca. PLN 107 mln. In Q PGE EJ 1 continued works in the programme of preparation to the construction of the atomic power plant in Poland. The Parties to the Shareholder Agreement foresee that the decision relating to the declaration of further participation of particular Parties in the next stage of the Project will be made after the completion of the Development stage. Continuation of the construction of the power unit In 2012 Enea Wytwarzanie and Hitachi Power Europe GmbH (presently Mitsubishi Hitachi Power Systems Europe GmbH) and Polimex-Mostostal SA consortium signed an agreement totalling PLN 5.1 bln net on the construction of 1,075 MW e gross supercritical bituminous coal fired power unit of the efficiency of 45.6% net. On 23 December 2016 Enea Wytwarzanie sp. z o.o. and Mitsubishi Hitachi Power Systems Europe and Polimeks-Mostostal consortium signed a deadline amending annex amending the date of handing over the unit for operation to 19 December Shifting the deadline stems from objective reasons, beyond the control of the contractual parties. The value of the contract (PLN 5.1 bln net) remained unchanged. The investment in the construction of the new power unit is one of the key undertakings in order to increase generating capacities of Enea Group for a long-term satisfaction of the demand for electricity of all the Group's customers. The new power unit in Kozienice Power Plant will be the most modern unit fired with bituminous coal in Poland and Europe. The completion of the investment will allow for increasing generating capacities of the power plant in Kozienice by ca. 30%. Structure of generating portfolio Irrespective of launching a unit with 1,075 MW capacity in Kozienice Power Plant, Enea plans its engagement in the construction of new sources or acquisitions of the ones already existing. Some of these activities will be implemented by partnerships with other energy groups. The implementation of the strategy will mean a significant growth in Enea s importance in electricity generation for the needs of the Public Power System. The total installed capacity of conventional sources is to increase to GW in It will allow the Group to generate TWh electricity from own sources, which will mean electricity generation and sales balance. Rating Maintaining on 30 June 2017 by Fitch Ratings agency of a long-term rating of Enea SA in national and foreign currency on the level of "BBB" is of a key importance as to the realisation of the investment intentions of the Group. The agency affirmed and concurrently withdrew, for contractual reasons, the national long-term rating on the level of A+(pol) with a stable outlook. Fitch Ratings has performedthe Company s creditrating since ) bip.me.gov.pl/files/upload/21394/wnioski%20z%20analiz%20prognostycznych_ pdf 2) ure.gov.pl/pl/wskazniki-dane-i-anali/zmiana-sprzedawcy-moni/4776,zmianasprzedawcymonitoring.html Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 58

59 EVENTS THAT MAY AFFECT FUTURE RESULTS Collective disputes There are no collective labour disputes in any of the key companies comprising Enea CG. In order to eliminate the risk and occurrence of a potential collective dispute the boards of the companies have a regular dialogue with the society. Trade unions of Lubelski Węgiel Bogdanka protest against introduction of the Corporate Governance of Enea Group. It may not however be a reason for initiating a collective dispute since the catalogue of the Act on solution of collective disputes precisely enlists cases which may be causes for a dispute. Court and administrative proceedings As at the date of publication of this report, no proceedings are underway regarding liabilities or claims, the party to which would be Enea SA or its subsidiary, whose single or total value would amount to 10% or more of EneaSA's equity. A detailed description of proceedings is presented in note 23 to the condensed interim consolidated financial statements of Enea Capital Group for the period from 1 January to 30 September Long-term development of energy market On 16 February 2016 the Government of Poland adopted Plan for Responsible Development of Poland 1). The document specifies the key directions of the state functioning and new impulses which will ensure its stable development in the future. The plan foresees that the development of the Polish economy will be based on five pillars: reindustrialisation, innovations, capital, foreign expansion and social and regional development. Pursuant to the provisions of the document relating to the energy market, in order to increase energy efficiency and unlock the investment after 2020 (including avoidance of blackout and becoming independent from energy imports) the state intends to e.g. support the development of energy infrastructure (energy bridges, power storing technologies), liberalise market areas and introduce capacity market mechanism which would be an impulse for investments in the segment of conventional power engineering. The process was commenced of implementing a dual-commodity market on which, apart from electricity, also capacity will be traded. The Ministry of Energy, in the document titled Functional solutions of the capacity market published on 30 September 2016 justifies the necessity of introducing a new market. At the beginning of December 2016 the Ministry of Energy presented a draft act on the capacity market. As mentioned in the justification, the introduction of the mechanism is to prevent shortages of generation capacity, create economic incentives for construction, maintenance and modernisation of generating units and managing the energy consumption at customers. 1) New projections for energy price paths Long-term financial projections of Enea Group based on the forecast electricity price paths, expectations as regards the changes of market prices of certificates of origin for energy, allowances for emissions of CO 2 and coal prices demonstrate a more and more demanding situation of the area of Generation. Due to the maintaining of energy prices on low levels, resulting in the imbalance between generated revenue and costs of energy generation, the Group foresees the necessity of a quick entry into force of the announced support mechanisms for system power engineering (e.g. through the implementation of the capacity market mentioned above). Difficulties in generating good financial results by generating sources will exclude a possibility of incurring expenditures on development investments which during the coming years seem inevitable. Variability and liquidity on the wholesale market Since the very beginning of 2016 we faced a decreased liquidity in electricity trade on the Electricity Futures Market managed by the Polish Power Exchange. The situation did not improve in the volume of electricity trading on the forward market of PPE in three quarters was by 36% lower than in the previous year. A drop in RDN market (spot) was smaller and amounted to 9%, however such the turn of events forces to look in the future with some anxiety related to the possibilities of hedging the trading positions. A positive fact here is a growing trade on the natural gas futures market, which allows for the diversification in the trading operations. Limits of Proprietary Interests In the area of PMOZE_A (certificates of origin for energy generated in renewable energy sources) characterises with a permanent surplus of rights on the market, translating into low prices. The Regulation of the Minister of Energy of 11 August2017 defining the level of duty for the years (17.5% and 18.5%, respectively) has improved the prospects of long-term reduction of the surplus of 25 TWh, which translated into a fairly strong price increase to the level of 61 PLN/MWh, and subsequently a decrease to about 40 PLN/MWh. In the area of PMOZE_BIO (certificates of origin for energy from agricultural biogas) the situation changed diametrically in relation to the obligatory surrender duty for 2016 and at present the prices of these allowances (over 312 PLN/MWh) are above the compensatory payment, taking into account the excise deduction premium (20 PLN/MWh) to fulfil the obligation by the redemption of certificates of origin. For PMEF (energy efficiency), after the decision of 20 July 2017 in the fifth tender for the selection of projects aimed at improving energy efficiency, it is expected that there will be an oversupply of PMEF on the market - which is reflected in the large discount of stock market quotations (about 500 PLN/toe in relation to compensatory payment 1,500 PLN/toe). The proprietary interest system presently in force for cogeneration is valid until the end of Gas portfolio Pursuant to the provisions of the Energy Law, the gas market is subject to a successive liberalisation. As of 1 October 2017 the prices for the other business consumers were deregulated. The obligation to submit tariffs to the Present of ERO for approval will apply only to the segment of households. Pursuant to the amendment to the Petroleum Act, as well as to the rules of conduct in situations of threat to the State's fuel safety and distortions in the oil market, energy companies engaged in natural gas trading activities abroad have been obliged to maintain compulsory gas reserves in a quantity corresponding to at least 30 days average daily import of the gas. Termination/withdrawal from proprietary interests purchase agreements by Enea SA On 28 October 2016 Enea submitted notices on termination or withdrawal from long-term contracts for the purchase of proprietary interests resulting from certificates of origin of energy from renewable sources (the so-called green certificates). The agreements were terminated. The reason for termination/withdraw from individual contracts by the Company was exhaustion of possibilities of restoring the contractual balance and equivalence of performance by the parties as a result of law amendments. The financial result stemming from the termination of the Agreements will be avoidance by the Company of a loss being the difference between contractual prices and the market price of green certificates. Currently, before the Regional Court in Poznań two cases are pending for determination of inefficacy of Enea SA s termination of agreements on sale of proprietary interests. Additionally, proceedings is pending against Enea SA for payment as remuneration for proprietary interests which resulted from the deduction from payments for damages suffered by Enea SA as the result of nonperformance by contractors of the contractual obligation to commence, in good faith, renegotiations of long-term contracts for sale of proprietary interests according to the adaptation clause binding uponthe parties. The estimated total value of Enea s contractual liabilities amounted to ca. PLN 1,187 mln net. Situation in the national bituminous coal mining sector The price path for electricity will be strongly dependant upon the costs of obtaining the production fuel. The necessity of restructuring the mining sector in mid-term will undoubtedly translate into the change in prices of supplied energetic materials. The direction of changes is not unambiguous, however as an essential element of the costs of generating domestic electricity it brings additional risks related to the process of futures contractation. Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 59

60 EVENTS THAT MAY AFFECT FUTURE RESULTS Incorporation of ElectroMobility Poland SA PGE Polska Grupa Energetyczna, Energa, Enea and Tauron Polska Energia incorporated ElectroMobility Poland on 19 October The operations of the new company are to contribute to the creation of the electromobility system in Poland. The new company s share capital is PLN 10 mln. Each of the companies incorporating ElectroMobility Poland holds 25% in the share capital with 25% of votes at a general meeting. Regulatory environment Enea SA's operations are conducted in the environment subject to detailed legal regulations, both in Poland and in the European Union. Legal regulations relating to the energy sector are often derivatives of political decisions, therefore there is a risk of frequent changes within this area which the Company is not able to foresee, and which may, as a consequence, result in a lack of unity and uniformity of regulations, based on which Enea SA conducts its operations. Regardless of the above, the Group's operations are governed by the current shape of the national legal system defining the framework for conducting a business activity in Poland, including in particular the tax system, competition and consumer protection, labour law and environmental protection. It can not be ruled out that changes in the above areas in terms of specific legal acts as well as individual interpretations related to significant areas of the Group's activity may become a source of potential liabilities of the Group companies. Directive of the European Parliament and of the Council No. 2015/2193 of 25 November 2015 on the limitation of emissions of certain pollutants into the air from medium combustion plants The key scope of the MCP Directive regulation is specification of: the emission norms for three types of air pollutants - sulphur dioxide (SO 2 ), nitric oxides (NO x ) and dusts for medium combustion plants, and also dates until which it is necessary to satisfy the duty of observing relevant volumes of air pollution in the existing and new medium combustion plants. As per Article 17(1) sentence 1 of the MCP Directive, member states are obliged to bring into force the laws, regulations and administrative provisions necessary to comply with the Directive by 19 December The provisions of the MCP Directive are significant as regards the companies in which Enea Wytwarzanie sp. z o.o. holds shares and in which the so-called medium combustion plants directly defined in the MCP directive are located. These companies include: Przedsiębiorstwo Energetyki Cieplnej sp. z o.o. in Oborniki (PEC Oborniki), Miejska Energetyka Cieplna Piła sp. z o.o. in Piła (MEC Piła) and Miejskie Przedsiębiorstwo Energetyki Cieplnej sp. z o.o. in Białymstok (MPEC Białystok). 1) REMIT Since 7 October 2015 there has been a duty to report basic transactions and data (for standard contracts for electricity and gas supplies) to the European Agency for the Cooperation of Energy Regulators (Agency or ACER). Pursuant to the REMIT regulation, i.e. the regulation of the European Parliament and the Council (EU) No. 1227/2011 dated 25 October 2011 on wholesale energy market integrity and transparency (REMIT), until the above mentioned date the participants of the wholesale energy and natural gas market mentioned in Article 9 item 1 of REMIT are obliged to register with the national regulatory authority. With the Act of 11 September 2015 on amendment of the Energy Law and some other acts (J. L. of 2015, item 1618), which entered into force on 30 October 2015, the principles were introduced guaranteeing REMIT application, including the penal provisions (Chapter 7A) for breaching the duties resulting from REMIT. On 7 April 2016, as per Article 12(2) sentence 3 and 4 of the Commission s (EU) implementing regulation No. 1348/2014 of 17 December 2014 on data reporting implementing Article 8(2) and Article 8(6) of Regulation (EU) No 1227/2011 of the European Parliament and of the Council on wholesale energy market integrity and transparency, an obligation entered into force of reporting to ACER the other transactions in wholesale trade (standard and non-standard contracts for supply of electricity or natural gas concluded on OTC market, transmission contracts) and data on the operation of systems published by operators of transmission systems, LNG operatorsand operators of warehousing systems. Amendment to RES Act On 14 August 2017 the President of the Republic of Poland signed the amendment to the act of 20 February 2015 o RES. As indicated in the justification to the draft act its objective is the introduction of a solution facilitating a balanced development in the area of renewable energy sources via changing the amount of the unit fee being the element allowing fro making the market of green certificates more flexible, and - on a long-term basis - decreasing the oversupply of certificates in this market. The above objective is to be achieved in particular via market facilitation of the level of the so-called compensatory payment. Pursuant to the amendment the fixed value of the compensatory payment was resigned from and in turn its height was related to the market prices of proprietary interests resulting from a certificate of origin. Additionally, a fee was changed (the method of its calculation) for an entry in the register of certificates of origin. Act of 20 July Water Resources Law On 2 August 2017 the President of the Republic of Poland signed the Water Resources Law. The act replaces the existing act of 2001 which regulates water resources management, including shaping and protection of water resources, use of water and water resources management, issues of titles to water reservoirs and lands covered with water, and also principles of managing these elements as relates to the State Treasury property. The act amendment is connected with the implementation of requirements of the Directive of the European Parliament establishing the framework of the Community operations as regards the water management policy. The act liquidates exemptions from fees for the commercial use of water for energy purposes, and also introduces additional fees on this account commencing from Draft act on capacity market In July 2017 a draft act on the capacity market was submitted to the Polish Sejm. The main objective of the regulations is guaranteeing the reliability and stability of electricity supply for the industry and households. The intention is to establish incentives for the investment and modernisation activities in the power industry. The market will relate to the so-called net available capacity, which may be offered by generators and controlled energy reception. According to the draft act the goal of the capacity market is guaranteeing energy supply security in the long-term and short-term perspective - the so-called generation capacity adequacy. Auctions which will be organised by the power transmission system operators are to be the key element of the capacity market. Pursuant to the draft the expenses of the capacity market are to be borne by electricity end users in the form of an additional fee. Draft act on electromobility and alternative fuels In April 2017 the Ministry of Energy published a draft act on electromobility and alternative fuels. Pursuant to the proposed provisions Operators of the distribution systems (ODS) are to assume a great role in the charging infrastructure needed for the electromobility development. According to the draft act, the ODS will be required to prepare a programme for the construction of public charging points and related projects necessary to connect these points to the grid in municipalities located in the area of its activity covered by the Act. In the case the competitions foreseen in the act for operators of the infrastructure are undecided ODS will be obliged to build and manage the open-access charging point. The ODS, as an infrastructure operator, will at the same time be obliged to provide all suppliers with access to a charging service on an equal footing. The draft act foresees at the same time numerous discounts and incentives for the owners of the charging infrastructure. 1) From 16 November 2017 Enea Serwis sp. z o.o. Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 60

61 EVENTS THAT MAY AFFECT FUTURE RESULTS Allowances for emissions of CO 2 A material element within costs, conditioning the profitability of electricity generation is the allocation of free allowances for emissions of CO 2 and other gases and substances in a given settlement period. Obtaining a free allocation of CO 2 emission is conditional on the implementation of dedicated investments in Enea Group notified in the National Investment Plan (NIP). The value of actual outlays is the base for obtaining allowances. In 2017 works are performed relating to the possibilities of using unallocated allowances due to lower than planned costs of implemented investments. The Ministry of Environment is conducting talks with EC regarding extension of the list of investment tasks, closed in 2012, with new projects from the area of RES, low-emission investments, investments relating to the energy efficiency, investments in transmission or heating networks. Additionally, activities will be carried out with the objective to determine the principles of the 4 th stage of EU ETS functioning starting from The major changes which may diametrically affect the market situation, include e.g.: increasing the linear ratio to 2.2% lackof free allowancesfor the sectors which are notexposedto the carbon leakagerisk doubling, during the first 4 years of MSR functioning,the number of allowancestaken from the auction pool to the reserve to the level of 24% of the allowance surplus permanentremoval of 800mln MSR allowancesfrom the market According to the schedule, Poland has been realising the assumptions of selling mln allowances for CO 2 emissions in mln come from allowances not sold in 2016, and mln constitutes the volume originally scheduled for sale in The point of sale of Polish EUAs is the EEX stock exchange auction platform with which Poland has re-concluded the contract for sale of emission allowances. Auctions are held every second Wednesday and mln EUAs are sold on each of them, except the first and the last ones conducted in August. In the period from January to September 2017 Poland sold mln allowances for emissions of CO 2. The works connected with the 4th stage of EU ETS system are currently in progress in the European Community institutions. The requirements presented in the period of three quarters of 2017 are subject to consultation by the European Commission, European Council ad European Parliament (the so-called trilogue). The market expects that during the presidency of Estonia in the EU Council the final version of the agreement will be determined, which will be foundations for the legal framework of the EU ETS system during Auction date Volume Auction price [EUR] Volume, cumulatively % volume, cumulatively 29 March % 12 April % 26 April % 10 May % 24 May % 7 June % 21 June % 5 July % 19 July % 2 August % 16 August % 30 August % 13 September % 27 September % 11 October % 25 October % 08 November % 22 November % 6 December % Reduction of emission of pollutants Pursuant to the EU regulations, in particular the Directive of the European Parliament and the Council No. 2010/75/EU dated 24 November 2010 on industrial emissions - IED (integrated pollution prevention and control), new, stricter standards of environmental protection have been in force since 1 January In relation to the above, all producers of electricity in Poland who use mainly high-emission coal technologies, are obliged to adjust the units to new environment requirements. The law, meeting the problems of entrepreneurs, provides for a possibility of using derogatory mechanisms. Mitigation of the requirements of the IED directive in the form of derogations, allows to achieve additional time for adaptation of generating units to stricter standards of pollutantemissions into the air. On 17 August 2017, the so-called BAT conclusions (BATc) for large combustion plants (Commission Implementing Decision (EU) 2017/1442 of 31 July 2017 establishing best available techniques (BAT) conclusions, under Directive 2010/75/EU of the European Parliament and of the Council for large combustion plants according to the directive of the European Parliament and the Council 2010/75/EU). The published BATc introduce e.g. more stringent (than in the IED Directive) requirements for such pollutants as: sulphur dioxide, nitric oxides and dust. The admissible emission levels (BAT - AELs) covered also additional substances: mercury, hydrogen chloride, hydrogen fluoride and ammonia. Pursuantto the requirementslaid down in BATc,starting from 17 August 2017, a 4-year adjustmentperiod commenced. Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 61

62 EVENTS THAT MAY AFFECT FUTURE RESULTS KozienicePower Plant 2017/2016 SO 2 emission [Mg] SO 2 emission ratio [kg/mwh] SO 2 NO X Dust SO 2 emission fee [PLN 000] NO x emission [Mg] NO x emission ratio [kg/mwh] NO x emission fee [PLN 000] Dust emissions [Mg] Dust emission ratio [kg/mwh] Dust emission fee [PLN 000] Gross generation of electricity [MWh] Q1-Q Q1-Q Change % Połaniec Power Plant 2017/2016 SO 2 emission [Mg] SO 2 emission ratio [kg/mwh] SO 2 NO X Dust SO 2 emission fee [PLN 000] NO x emission [Mg] NO x emission ratio [kg/mwh] NO x emission fee [PLN 000] Dust emissions [Mg] Dust emission ratio [kg/mwh] Dust emission fee [PLN 000] Gross generation of electricity [MWh] Q1-Q Q1-Q Observing regulatory and formal requirements Enea Wytwarzanie Change % EneaWytwarzaniesp. z o.o. uses the derogationresulting from IED directive, which is the Transitional NationalPlan (TNP): within sulphur dioxide and dust emissions: Kozienice Power Plant together with Białystok Heat and Power Plant within NO x emission: Białystok Heat and Power Plant individually In the period of TNP validity, i.e. from 1 January 2016 to 30 June 2020, annual emission thresholds are in force. Pollutant emission within TNP for Q1-Q and the level of using annual emission thresholds was listed in the table below. Installation Kozienice Power Plant Bialystok Heat and Power Plant Total In Q1-Q emission standards specified in the integrated permit were not exceeded. Enea Połaniec Power Plant SO 2 Dust NO X [Mg] % utilised [Mg] % utilised [Mg] % utilised emission annual threshold n/a n/a emission annual threshold emission annual threshold Enea Połaniec SA benefits from the derogation resulting from IED Directive - natural derogation 17,500 hours which covers boiler No. 1. Until the end of September ,653 hours were used from the limit of 17,500 hours, including in 2017 alone 1,464 hours were used (617 hours in Q3 2017). In Q1-Q emission standards specified in the integrated permit were not exceeded. Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 62

63 EVENTS THAT MAY AFFECT FUTURE RESULTS 2017 Tariff - distribution of electricity: Detailed rules of tariff calculation are governed by the Energy Law and relevant regulations relating to tariffs. Pursuant to the Energy Law, tariffs for a incensed energy company are approved by the President of ERO. The tariff for Enea Operator for 2017 was approved by the President of ERO on 15 December It was prepared in accordance with the strategy developed and published by the President of ERO in the document titled ODS Tariffs for The rates of fees for the distribution services approved for 2017 resulted in changes in averagepayments for Customers in particulartariff groups in relationto 2016: A tariff group set - growth by 0.96% B tariff group set - growth by 5.73% C tariff group set - growth by 4.91% G tariff groupset - growth by 5.61% Operating Capacity Reserve (OCR) OCR mechanism is conducted by Polskie Sieci Elektroenergetyczne - Operator of the Transmission System (OTS) within the system servicescatalogue. For producers of energy it is an economic incentive to offer generating capacities to OTSs in the peak hours of demand for power. OCR includes the available generating capacity, being the surplus of the power available to OTSs over the contracts concluded to satisfy demand for electricity A unit price for OCR depends on the volume of generating capacity available to OTSs over the demand for electricity covered: within energy sale agreements on the Balancing Market as part of the free exchange A unit price for OCR depends on the volume of generating capacity available to OTSs over the demand and may not be higher than the reference price which for 2015 amounts to PLN PLN/MWh, for PLN/MWh andfor 2017the levelis PLN 41.79PLN/MWh. The diagram below presents the unit price for OCR depending on the volume of generation capacity available to OTSs: OCR unit price [PLN/MWh] Surplus of generation capacity [MWh] Parametersofthe OCR settlementmodel for : Parameter Hourly budget [PLN] Reference price [PLN/MWh] Hourly volume of required OCR [MWh] Number of demand peak hours OCR annual budget [PLN mln] In 2016 the rules were changed for settling OCR, which in previous periods resulted in the fact that in the hours during which the OCR unit price reached the maximum level OTS did not fully use the budget designated for that service. Since 2016 new adjustment settlements were introduced (monthly and annual), which re-verify settlements and any unused funds from OCR are distributed among the units participating in the reserve. Since 2017, consumption units with the possibility of reducing the demand (DSR) are included within OCR (POR). Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 63

64 CSR - CORPORATE SOCIAL RESPONSIBILITY Enea Group s Corporate social responsibility in Q was concentrated on the implementation of the following actions: Enea Group published the corporate responsibility report for 2016 Corporate volunteering and charity campaigns At the beginning of Q Enea Group published the sixth Corporate Social Responsibility Report of Enea Group for 2016 covering the period from 1 January to 31 December As in previous years, reporting of non-financial data was prepared compliant with the guidelines of the international standard - Global Reporting Initiative G4, on the level of Core application. This is the fifth report of Enea disclosing non-financial data on-line, only the first one was issued traditionally. The document is available on a dedicated, interactive website published in Polish and English. The report presents the most important issues from Enea Group s responsible business and sustainable development perspective, i.e. the so-called significant aspects of reporting sustainable development. They describe the scale and nature of the Group s impact on the social environment and implemented and planned investments for the environmental protection. Employees from all the reporting companies: both CSR coordinators in the Group companies and Employees responsible for crucial areas take part in works over the development of data for the CSR report. The reporting process is coordinated by a dedicated organisational unit responsible for CSR in Enea SA. Release your energy and give yourself to others this is a slogan which in 2017 motivates Enea Group s Volunteers. Due to the engagement of Enea Foundation each activity related to the Corporate volunteering may obtain PLN 2,000 co-financing. Volunteers from the Group supported educational activities during the Picnic entitled "Little Pole" ( Polak Mały ) on the occasion of the Children's Day, which is organised annually by the Chancellery of the Prime Minister. Volunteer Rescuers conducted e.g. first aid training. Enea's crew took part in the second edition of the Charity Sailing Regatta PHN-GDYNIA RACING The event was held on the waters of the Gulf of Gdańsk. Regattas have traditionally been linked to charity campaigns. All the crews taking part donated to the Children's Hospice Bursztynowa Komnata in Gdynia run by the St. Lawrence Hospice Association. Together, PLN 168 thou. was collected for the care of the hospice patients. Revitalisation of the garden at the Centre for Family Support in Poznań (Former Children s Home No. 1 at Swoboda street). There were 40 participants from various companies and institutions (among others volunteers from Enea Foundation and volunteers from Bank BZ WBK). 50 Employees (10 teams) from Enea Group ran in the annual Poznań Business Run charity relay race. This year's sixth edition of this sport-charity event allowed for collection of PLN 1.5 mln from the entry fees alone in the whole Poland. As each year these funds will be used to support people with disabilities - charges of the Poland Business Run Foundation. Private lessons for the charges of the "Panda" socialisation centre in Kozienice - 10 volunteers of Enea Wytwarzanie from the beginning of September have given private lessons andlanguage classes to a group of 25 school children. Competency volunteering - Continuing the development of competence volunteering through the implementation of programs: Power-not so scary and First aid - pre-medical rescue. Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 64

65 CSR - CORPORATE SOCIAL RESPONSIBILITY Enea Group s Corporate social responsibility in Q was concentrated on the implementation of the following actions: Targeted projects of Enea Foundation - Enea Talent Academy Enea Talent Academy commenced on 1 September 2017 The programme is directed to primary school pupils (for grade V and higher) who have documented achievements and develop their talents in science, art or sport. Public primary and lower secondary schools may also apply, which intend to implement projects that support the development of their students' interests. The program is directed to pupils and institutions from these areas of Poland, where Enea Group is particularly active in business terms. It is primarily the north-western region, and also the areas of Kozienice, Połaniec, Białystok and Łęczna in the Lublin region. Scholarships worth of PLN 3,000 will be available to students, and grants will be awarded to winners in the amount of PLN 10,000. Applications to the Academy of Talents were accepted until 15 October, and the winners will be announced on 10 January Grant programme The first edition of the Power of Helping is after us. So far, two of the three winning projects have been completed: in July, there was a festival for patients of the Children's Oncology Clinic from Karol Jonsher Clinical Hospital in Poznań. The project was implemented by the Foundation for the Assistance to Children with Cancerous Diseases in Poznań together with volunteers from Enea. in September the association maliniewidzialni.leszno.pl from Leszno together with Volunteers from the Enea Group made a picnic - "Pirate Adventures" dedicated to the members of the association and their families. The project "My group is touring the country" will be completed in November this year. Action for the needy Once again, the Group's employees participated in a cyclical volunteer action - A Backpack full of Smiles. They collected over 12 cartons full of backpacks, notebooks, crayons, paints, coloured papers, sharpeners and other items without which a real student bag cannot function. Employees brought gifts personally and sent them by mail. Cartons and parcels were coming from Szczecin, Bydgoszcz and from the location at Strzeszyńska in Poznań. Gifts were given to children from needy families from Wielkopolska and the charges of the "Panda" socialisation centre in Kozienice. Caritas of the Archdiocese of Poznań became the partner of the action. Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 65

66 CSR - CORPORATE SOCIAL RESPONSIBILITY LW Bogdanka s corporate social responsibility in Q was concentrated on the implementation of the below actions: Corporate volunteering in LW Bogdanka The corporate volunteering of LW Bogdanka was realised i Q through the following campaigns: Positively stoked - collectionof caps for childrenand young peopleof Lublin Hospiceunderthe name of Small Prince Gold Rush - collection of low-denomination coins of 1, 2, 5 grosz, which were given at the end of June to the Lublin PCK [Polish Red Cross] branch reaching a record-breaking 500 kg in the region of collected blood and registration in the database of marrow donors, organised in the Company and of bottom-up charity employee campaigns for groups of people in a difficult life situation, e.g. victims of accidents and sick people. Other initiatives Mine close to the nature As the founder and co-organiser (with OTOP Polish Society for the Protection of Birds) of Nadrybie Educational Path, LW Bogdanka continues to expand its infrastructure, and also intensifies the educational activities carried out on its area. In Q3 2017, on the area of the path the stocktaking of flora and fauna was performed, ecological workshops were prepared, and in addition, the works updating the Guide were carried out following on the ecological path "Nadrybie". Education in C-Zone - multimedia exhibition presenting the history of Bogdanka and Lublin Coal Basin LW Bogdanka willingly shares its history, tradition and achievements with children and young people, via organisation of meetings with Employees, who in specially designed multimedia rooms, familiarise them with the mining issues. Corporate responsibility report of LW Bogdanka for 2016 In July 2017 LW Bogdanka published another corporate responsibility report. Integrated report for 2016 joins both financial results and non-financial data. The report was developed based on GRI (Global Reporting Initiative) G4 guidelines using the International Integrated Reporting Framework. Operating Summary Enea Group's organisation and operations Financial position Shares and shareholding Authorities Other information Attachments 66

67 Attachments

68 ATTACHMENT NO. 1 - FINANCIAL RESULTS OF ENEA SA Profit and loss statement of Enea SA - Q1-Q [PLN 000] Q1-Q Q1-Q Change Change % Sales of electricity to retail users % Sales of gas to retail consumers % Sales of distribution services to users holding comprehensive agreements % Sales of energy and gas to other entities % Sales of services % Other revenue % Excise tax % Net sales revenue % Amortisation/depreciation % Employee benefit costs % Consumption of materials and raw materials and value of goods sold % Purchase of energy and gas for resale % Transmission and distribution services % Other outsourced services % Taxes and charges % Cost of sales % Other operating revenue % Other operating expenses % Profit / (Loss) on sales and liquidation of tangible fixed assets Operating profit % Financial expenses % Financial revenue % Dividend revenue % Profit before taxes % Income tax % Net profit for the reporting period % EBITDA % Q1-Q3 2017: Enea SA s EBITDA change drivers (growth by PLN 10 mln): (+) higher first contribution margin by PLN 121 mln: (-) lower average selling price by 4.5% (+) lower costs of ecologicalobligations by 45.4% (+) lower average purchase price of energy by 8.7% (+) growth in sale volumes by 7.6% (-) lower resulton trade in gas (+) lower costs of employee benefits by PLN 3 mln (-) higher costs of outsourced services by PLN 16 mln: (-) higher selling costs of customer service by PLN 11 mln (-) higher costs of common services by PLN 8 mln (+) lower costs of consulting services by PLN 2 mln (+) lower costs of advertising and representation by PLN 1 mln (-) lower result on the other operating activities by PLN 98 mln: (-) higher provisions for latent claims and anticipated losses by PLN 81 mln (-) higher costs of donations by PLN 7 mln (-) higher litigation costs by PLN 1 mln (-) higher written-off debts by PLN 2 mln (-) higher impairment of receivables by PLN 4 mln 68

69 ATTACHMENT NO. 2 - FINANCIAL RESULTS OF ENEA SA Profit and loss statement of Enea SA - Q [PLN 000] Q Q Change Change % Sales of electricity to retail users % Sales of gas to retail consumers % Sales of distribution services to users holding comprehensive agreements % Sales of energy and gas to other entities % Sales of services % Other revenue Excise tax % Net sales revenue % Amortisation/depreciation % Employee benefit costs % Consumption of materials and raw materials and value of goods sold % Purchase of energy and gas for resale % Transmission and distribution services % Other outsourced services % Taxes and charges % Cost of sales % Other operating revenue % Other operating expenses % Profit / (Loss) on sales and liquidation of tangible fixed assets Operating profit % Financial expenses % Financial revenue % Dividend revenue Profit before taxes % Income tax Net profit for the reporting period % EBITDA % Q3 2017: Change factors of EBITDA of Enea SA (drop by PLN 47 mln): (+) higher first contribution margin by PLN 8 mln: (-) lower average selling price by 4.7% (+) lower costs of ecologicalobligations by 35.8% (+) lower average purchase price of energy by 5.6% (+) growth in sale volumes by 6.5% (-) lower resulton trade in gas (-) higher costs of outsourced services by PLN 7 mln: (-) higher selling costs of customer service by PLN 4 mln (-) higher costs of common services by PLN 3 mln (+) lower costs of advertising andrepresentationservicesby PLN 1 mln (-) lower result on the other operating activities by PLN 49 mln: (-) higher provisions for latent claims and anticipated losses by PLN 38 mln (-) higher written-off debts by PLN 4 mln (-) higher impairment of receivables by PLN 6 mln 69

70 ATTACHMENT NO. 3 - FINANCIAL RESULTS OF ENEA OPERATOR Profit and loss statement of Enea Operator sp. z o.o. Q1-Q [PLN 000] Q1-Q Q1-Q Change Change % Revenue from sales of distribution services to end users % Revenue from additional fees % Revenue from non-invoiced sales of distribution services Clearing of the Balancing Market % Fees for customer grid connection % Revenue from the illegal collection of electricity % Revenue from services % Sales of distribution services to other entities % Sales of goods and services and other revenue % Sales revenue % Depreciation and amortisation of fixed and intangible assets % Employee benefit costs % Consumption of materials and raw materials and value of goods sold % Purchase of energy for own needs and grid losses % Costs of transmission services % Other outsourced services % Taxes and charges % Cost of sales % Other operating revenue % Other operating expenses % Profit / (loss) on sales and liquidation of tangible fixed assets % Operating profit / (loss) % Financial revenue , % Financial expenses % Profit / (loss) before tax % Income tax % Net profit / (loss) % EBITDA % Q1-Q3 2017: Enea Operator sp. z o.o. s EBITDA change drivers (drop by PLN 50 mln): (+) higher revenue from sales of distribution services to end customers by PLN 169 mln results mainly from higher costs carried forward - increase of the transition fee and the introduction of a RES fee from 1 July 2016 and higher volume of sales of distribution services to end customers by 398 GWh (+) lower costs of purchasing energy for covering the book-tax difference by PLN 13 mln stem from lower volumes by PLN 54 GWh and lower average electricity price (+) higher revenue from the settlement of electricity on the balancing market by PLN 3 mln result from higher volumes by 18 GWh (-) higher costs of purchasing transmission services by PLN 160 mln stem mainly from higher incurred costs - higher transitory charge and introduction as of 1 July 2016 of a RES fee and higher rate of the fixed transmission fee in PSE tariff (-) lower revenue from sales of distribution services to other entities by PLN 7 mln stem from a lower volume of exported electricity to the neighbouring ODSs (-) higher costs of employee benefits by PLN 24 mln, mainly as a result of higher levels of provisions and higher salaries and derivates (-) lower revenue from sale of services by PLN 2 mln, mainly non-licensed services to external customers (-) higher costs of other outsourced services by PLN 17 mln mainly in the areas of IT, measurements, building management (-) higher costs of taxes and charges by PLN 13 mln (result of the investments implemented within the grid assets) (-) lower other operating revenue by PLN 15 mln stem mainly from the performance of agreements for collision removal and shifting the energy devices to the assets in 2016 (one-offs) (-) higher other operating expenses by PLN 3 mln stem mainly from the growth in impairment of receivables 70

71 ATTACHMENT NO. 4 - FINANCIAL RESULTS OF ENEA OPERATOR Profit and loss statement of Enea Operator sp. z o.o. - Q [PLN 000] Q Q Change Change % Revenue from sales of distribution services to end users % Revenue from additional fees % Revenue from non-invoiced sales of distribution services % Clearing of the Balancing Market % Fees for customer grid connection % Revenue from the illegal collection of electricity % Revenue from services % Sales of distribution services to other entities % Sales of goods and services and other revenue % Sales revenue % Depreciation and amortisation of fixed and intangible assets % Employee benefit costs % Consumption of materials and raw materials and value of goods sold % Purchase of energy for own needs and grid losses % Costs of transmission services % Other outsourced services % Taxes and charges % Cost of sales % Other operating revenue % Other operating expenses % Profit / (loss) on sales and liquidation of tangible fixed assets % Operating profit / (loss) % Financial revenue % Financial expenses % Profit / (loss) before tax % Income tax % Net profit / (loss) % EBITDA % Q3 2017: Enea Operator sp. z o.o. s EBITDA change drivers (drop by PLN 3 mln): (+) higher revenue from sales of distribution services to end customers by PLN 45 mln results mainly from higher costs carried forward - increase of the transition fee and the introduction of a RES fee from 1 July 2016 and higher volume of sales of distribution services to end customers by 75 GWh (+) lower costs of purchasing energy for covering the book-tax difference by PLN 2 mln stem from lower volumesby PLN 6 GWh andlower average purchaseprice (+) higher revenue from the settlement of electricity on the balancing market by PLN 3 mln result from higher volumes by 17 GWh (-) higher costs of purchasing transmission services by PLN 46 mln stem mainly from higher incurred costs - higher transitory charge and introduction as of 1 July 2016 of a RES fee and higher rate of the fixed transmission fee in PSE tariff (-) higher costs of employee benefits by PLN 3 mln, mainly as a result of higher salaries and mark-ups (-) higher costs of taxes and charges by PLN 3 mln (result of the investments implemented within the grid assets) (-) lower revenue from sales of distribution services to other entities by PLN 2 mln stemming from a lower volume of exported electricity to the neighbouring ODSs (-) lower other operating revenue by PLN 1 mln stem mainly from lower revenue due to agreements for removal of collisions and shifting the energy devices to the assets (+) lower other operating expenses by PLN 2 mln stem mainly from a positive result on insurance and fortuitous events and a drop in impairment of receivables 71

72 ATTACHMENT NO. 5 - FINANCIAL RESULTS OF ENEA WYTWARZANIE Profit and loss statement of Enea Wytwarzanie sp. z o.o. - Q1-Q [PLN 000] Q1-Q Q1-Q Change Change % Revenue from sale of electricity % generating licence % trade licence % Revenue from certificates of origin % Revenue from sales of CO 2 emission allowances % Revenue from sale of heat % Revenue from services % Sales of goods and services and other revenue % Excise tax % Net sales revenue % Depreciation and amortisation of fixed and intangible assets % Employee benefit costs % Consumption of materials and raw materials and value of goods sold % Costs of energy purchases for resale % Transmission services % Other outsourced services % Taxes and charges % Cost of sales % Other operating revenue % Other operating expenses % Profit / (loss) on sales and liquidation of tangible fixed assets % Non-financial fixed assets impairment write-down % Operating profit / (loss) % Financial revenue % Financial expenses % Dividend revenue % Profit / (loss) before tax % Income tax % Net profit / (loss) % EBITDA % Q1-Q3 2017: Change drivers of EBITDA of Enea Wytwarzanie sp. z o.o. (drop by PLN 1.0 mln): Segment of System Power Plants - drop in EBITDA by PLN 20.4 mln (-) lower margin on trade and the Balancing Market by PLN 46.1 mln (+) higher revenue from Regulatory System Services by PLN 14.4 mln (+) lower fixed costs by PLN 10.0 mln (+) higher margin on generation by PLN 0.8 mln Segment of Heat - growth in EBITDA by PLN 14.4 mln (+) lower costs of biomass consumption by PLN 51.9 mln (+) lower fixed costs by PLN 1.4 mln (-) lower revenuefrom sales of heat by PLN 1.2 mln (-) lower revenue from certificates of origin by PLN 7.7 mln (-) lower revenue from sales of electricity by PLN 10.6 mln (-) higher costs of CO 2 emission allowances by PLN 6.4 mln (-) higher costs of coal consumption by PLN 13.0 mln Segment of RES - EBITDA higher by PLN 5.0 mln (+) Area of Water (PLN +6.4 mln): higher revenue from electricity by PLN 6.9 mln, lower revenue from certificates of origin by PLN 1.3 mln (+) Area of Biogas (PLN +3.1 mln): higher revenue from certificates of origin by PLN 2.0 mln, lower variable costs by PLN 0.7 mln, lower fixed costs by PLN 0.3 mln (-) Area of Wind (PLN -4.5 mln): increase of fixed costs by PLN 5.2 mln (property tax), decrease of income from certificates of origin by PLN 3.1 mln, an increase of revenue from electricity by PLN 3.4 mln 72

73 ATTACHMENT NO. 6 - FINANCIAL RESULTS OF ENEA WYTWARZANIE Profit and loss statement of Enea Wytwarzanie sp. z o.o. - Q [PLN 000] Q Q Change Change % Revenue from sale of electricity % generating licence % trade licence % Revenue from certificates of origin % Revenue from sales of CO 2 emission allowances % Revenue from sale of heat % Revenue from services % Sales of goods and services and other revenue % Excise tax % Net sales revenue % Depreciation and amortisation of fixed and intangible assets % Employee benefit costs % Consumption of materials and raw materials and value of goods sold % Costs of energy purchases for resale % Transmission services % Other outsourced services % Taxes and charges % Cost of sales % Other operating revenue % Other operating expenses Profit / (loss) on sales and liquidation of tangible fixed assets % Non-financial fixed assets impairment write-down Operating profit / (loss) % Financial revenue % Financial expenses % Dividend revenue Profit / (loss) before tax % Income tax % Net profit / (loss) % EBITDA % Q3 2017: Change drivers of EBITDA of Enea Wytwarzanie sp. z o.o. (drop by PLN 12.5 mln): Segment of System Power Plants - drop in EBITDA by PLN 22.4 mln (-) lower margin on trade by PLN 16.3 mln (-) lower margin on generation by PLN 3.8 mln (-) lower margin on the Balancing Market by PLN 2.2 mln Segment of Heat - growth in EBITDA by PLN 3.1 mln (+) lower costs of biomass consumption by PLN 20.0 mln (+) higher revenue from sales of electricity by PLN 1.3 mln (+) higher revenuefrom sales of heat by PLN 1.0 mln (-) lower revenue from certificates of origin by PLN 3.0 mln (-) higher costs of CO 2 emission allowances by PLN 5.2 mln (-) higher costs of coal consumption by PLN 10.4 mln Segment of RES - EBITDA higher by PLN 6.8 mln (+) Area of Water (PLN +4.8 mln): higher revenue from sales of electricity by PLN 3.6 mln, fixed costs lower by PLN 0.5 mln, higher revenuefrom certificates of origin by PLN 0.8 mln (+) Area of Biogas (PLN +1.0 mln): higher revenue from certificates of origin by PLN 0.4 mln, lower costs of use and transportof substrates by PLN 0.5 mln (-) Area of Wind (PLN +1.0 mln): increase of revenue from certificates of origin by PLN 1.0 mln, increase in other operating activity by PLN 0.7 mln, increase in revenue from sale of electricity by PLN 1.0 mln, increase of fixed costs by PLN 1.8 mln (propertytax) 73

74 ATTACHMENT NO. 7 - FINANCIAL RESULTS OF ENEA ELEKTROWNIA POŁANIEC CG Profit and loss statement of Enea Elektrownia Połaniec CG [PLN 000] Sales revenue Excise tax 50 Net sales revenue Depreciation and amortisation of fixed and intangible assets Employee benefit costs Consumption of materials and raw materials and value of goods sold Costs of energy purchases for resale Transmission services 938 Other outsourced services Taxes and charges Cost of sales Other operating revenue Other operating expenses 530 Profit / (loss) on sales and liquidation of tangible fixed assets : EBITDA of Enea Połaniec Power Plant CG: revenue from the sale of electricity (including RSS) PLN 1,055 mln (sale of 6,260 GWh of electricity) revenue from sales of heat PLN 29,8 mln with sales volumes amountingto 1,257 GJ revenue from certificates of origin (PLN 58 mln) - sales adjusted with revenue for recognition, cost of goods sold and revaluation of the stock of green certificates as at the balance sheet date The other revenue (PLN 4 mln) - revenue from rent and management of combustion by-products consumption of materials and raw materials and value of goods sold amounted to PLN 705 mln, including fuel consumption PLN 564 mln, reserve for CO 2 consumption PLN 118 mln, repair materials PLN 12 mln, other PLN 11 mln (consumption of other materials and energy) purchase of energy for sale PLN 136 mln - purchase volume 1,083 GWh other outsourced services PLN 109 mln - including: repair services: PLN 62 mln, IT and telecommunication services PLN 4 mln, transport services PLN 8 mln, waste management PLN 13 mln, property insurance PLN 5 mln, other services PLN 17 mln (including legal services, audits, rentandlease, propertyprotection, other externalservices) taxes 19 mln PLN - including: property tax PLN 11.6 mln, environmental protection PLN 7.5 mln result on other operating activity PLN 2 mln - release of receivables adjustment due to settlement of the penalty by the contractor related to failure to purchase certificates of origin Operating profit / (loss) Financial revenue Financial expenses 628 Profit / (loss) before tax Income tax Net profit / (loss) EBITDA

75 ATTACHMENT NO. 8 - FINANCIAL RESULTS OF ENEA ELEKTROWNIA POŁANIEC CG Profit and loss statement of Enea Elektrownia Połaniec CG - Q [PLN 000] Q Sales revenue Excise tax 24 Net sales revenue Depreciation and amortisation of fixed and intangible assets Employee benefit costs Consumption of materials and raw materials and value of goods sold Costs of energy purchases for resale Transmission services 69 Other outsourced services Taxes and charges Cost of sales Other operating revenue 230 Other operating expenses 176 Q3 2017: EBITDA of Enea Połaniec Power Plant CG: revenue from the sale of electricity (including RSS) PLN 481 mln (sale of 2,853 GWh of electricity) revenue from sale of heat PLN 13 mln with sales volumes amounting to 571 TJ revenue from certificates of origin PLN 37 mln - sales adjusted with revenue from recognition, cost of goods sold and revaluation of the stock of green certificates as at the balance sheet date the other revenue PLN 2 mln - revenue from rent and management of combustion by-products consumption of materials and raw materials and value of goods sold amounted to PLN 341 mln, including fuel consumption PLN 273 mln, reserve for CO 2 consumption PLN 61 mln, repair materials PLN 3 mln, other PLN 5 mln (consumption of other materials and energy) purchase of energy for sale PLN 50 mln - purchase volume 367 GWh Other outsourced services PLN 52 mln - including: repair services PLN 29 mln, IT and telecommunication services PLN 2 mln, transport services PLN 4 mln, waste management PLN 6 mln, property insurance PLN 2 mln, other services PLN 10 mln (including legal services, audits, rentandlease, propertyprotection, other externalservices) taxes PLN 7 mln - including: property tax PLN - 5 mln, environmental protection PLN - 4 mln, other PLN + 2 mln (including release of the VAT provision) Profit / (loss) on sales and liquidation of tangible fixed assets -23 Operating profit / (loss) Financial revenue -626 Financial expenses 84 Profit / (loss) before tax Income tax Net profit / (loss) EBITDA

76 ATTACHMENT NO. 9 - FINANCIAL RESULTS OF LW BOGDANKA CG Profit and loss statement of LW Bogdanka CG - Q1-Q [PLN 000] Q1-Q Q1-Q Change Change % Net sales revenue % Depreciation and amortisation of fixed and intangible assets % Employee benefit costs % Consumption of materials and raw materials and value of goods sold % Other outsourced services % Taxes and charges % Cost of sales % Other operating revenue % Other operating expenses % Q1-Q3 2017: LW Bogdanka CG s EBITDA drivers: (-) drop of revenue from coal sales: lower volume sales (-41 thou. t) at slightly lower price (-0.05 PLN/t) (-) decrease of revenue from sales of other products and services realised beyond Bogdanka CG by subsidiary companies (+) drop in the unit cost of sold products, goods and materials excluding amortisation - better cost efficiency with a decreasing volume of coal sold (-41 thou. t) Significant one-offs: lower other operating revenue - in release of the provision for damages for Budimex due to a favourable ruling of the Court of Appeal loss on the liquidation of tangible assets - mainly the net value of liquidated excavations lower financial revenue - in provision for interest on Budimex s claims was released - PLN 6 mln lower financial costs - lower interest expenses on bonds as a result of bond redemption (in Q bonds totalling PLN 300 mln were redeemed) Profit / loss on sales and liquidation of tangible fixed assets % Non-financial fixed assets impairment write-down % Operating profit / loss % Financial revenue % Financial expenses % Profit / loss before tax % Income tax % Net profit / loss % EBITDA % 76

77 ATTACHMENT NO FINANCIAL RESULTS OF LW BOGDANKA CG Profit and loss statement of LW Bogdanka CG - Q [PLN 000] Q Q Change Change % Net sales revenue % Depreciation and amortisation of fixed and intangible assets % Employee benefit costs % Consumption of materials and raw materials and value of goods sold % Other outsourced services % Taxes and charges % Cost of sales % Other operating revenue % Q3 2017: LW Bogdanka CG s EBITDA drivers: (-) drop of revenue from coal sales: lower volume sales (-324 thou. t) and higher price (-0.05 PLN/t) (-) decrease of revenue from sales of other products and services realised beyond Bogdanka CG by subsidiary companies (-) growth in the unit cost of sold products, goods and materials excluding amortisation - constant cost control with a considerably decreasing volume of coal sold (-324 thou. t) Significant one-offs: loss on the liquidation of tangible assets - mainly the net value of liquidated excavations lower financial revenue - lower income from loans in relation to a lower level of available cash (in Q bonds totalling PLN 300 mln were redeemed) lower financial expenses - lower costs of interest on bonds as a result of bond redemption in Q Other operating expenses % Profit / loss on sales and liquidation of tangible fixed assets % Non-financial fixed assets impairment write-down % Operating profit / loss % Financial revenue % Financial expenses , % Profit / loss before tax , % Income tax % Net profit / loss % EBITDA % 77

78 GLOSSARY OF TERMS Financial ratios Below please find a glossary of terms and a list of acronyms used in this report. Customer Description EBITDA = Operating profit (loss) + amortisation and depreciation Return on equity (ROE) = Return on assets (ROA) = Net profitability = Operating profitability = EBITDA profitability = Current ratio = Equity-to-fixed assets ratio = Total debt ratio = Net debt / EBITDA = Current receivables turnover in days = Turnover of trade and other payables in days = Inventory turnover in days = Cost of products, goods and materials sold = Net profit (loss) for the reporting period Equity Net profit (loss) for the reporting period Total assets Net profit (loss) for the reporting period Net sales revenue Operating profit (loss) Net sales revenue EBITDA Net sales revenue Current assets Current liabilities Equity Fixed assets Total liabilities Total assets Interest-bearing liabilities - cash and cash equivalents EBITDA LTM Average trade and other receivables x number of days Net sales revenue Average trade and other liabilities x number of days Cost of products, goods and materials sold Average inventory x number of days Cost of products, goods and materials sold Use of materials and value of goods sold; Purchases of energy for resale; Transmission services; other outsourced services; taxes and charges; excise tax ts 78

79 GLOSSARY OF TERMS Sectoral terms / abbreviations Abbreviation/term Full name/explanation Abbreviation/term Full name/explanation "Green" proprietary interests "Light blue" proprietary interests "Purple" proprietary interests "Red" proprietary interests "White" proprietary interests "Yellow" proprietary interests ACER AMI Backloading Same as PMOZE Proprietary Interests in certificates of origin being the confirmation of electricity generationfrom agriculturalgas Proprietary Interests in certificates of origin being the confirmation of electricity generation in a cogeneration unit fired with methane released and abstracted on pit mining works or with gas obtained from biomass processing in the meaning of Article 2 item 1(2) of the Act on biocomponents and liquid biofuels Proprietary Interests in certificates of origin being the confirmation of electricity generationin other cogenerationsources Proprietary interests in certificates of origin resulting from energy efficiency certificates, the so called "white" certificates Proprietary Interests in certificates of origin being the confirmation of electricity generation in a gas cogeneration unit or in a unit of the total installed capacity of up to 1 MW European Agency for the Cooperation of Energy Regulators - EU agency established pursuant to the third energy package. The objective of the Agency is coordination and supporting the national regulatory authorities. A full list of duties is specified in Regulation No. 713/2009 Advanced systems measuring, collecting and analysing energy consumption and enabling two-way communication between the end user and central system. AMI includes both intelligent meters and smart power grids Suspension of some auctions of allowances for CO 2 emission by EU in order to increase the price of allowances Carbon leakage CER CO 2 Cogeneration DAP EFX Energy Law EUA European Emissions Trading System EU ETS Forward market GPZ ICE IGCC Moving carbon dioxide emissions from one country to another Certified Emission Reduction Carbon dioxide A technological process of a combined generation of electricity and usable heat energy in combined heat and power plants Delivered at Place the situation in which the seller is responsible to deliver the goods to a specific place, but the buyer performs the unloading. Index for session transactions the subject of which are contracts for proprietary interests resulting from energy efficiency certificates, the so called "white" certificates The Act of 10 April Energy Law (Journal of Laws 1997 No. 54 item 348, as amended) EU Emission Allowance - allowances for emissions within the European Emissions TradingSystem European system supporting reduction of greenhouse gases emissions Electricity market on which forward productsare listed Transformer/Switching Station - transformer station, responsible for amending of high or medium voltage into low voltage for end users on a specific area Trading platform enabling trade in allowances for emissions of CO 2 (EUA) and units of certified reductionof emissions (CER) on futures market Integrated gasification combined cycle gas and steam unit technology with integral fuel gasification. Enables construction of a power plant with a much greater efficiency as comparedto conventional coal based power plants. Balancing market BAT CAPEX Technical market by an Operator of the transmission system Its objective is balancing, in real time, the demand for electricity with its production in the public power system (PPS, Polish "KSE") Best Available Techniques the document formulating conclusions relating to the best available techniques for installations it covers, and indicating as well levels of emissions connected with the best available techniques. Capital expenditures IOS installation KECX KGMX Fue gas desulphurisationplant Index for session transactions the subject of which are contracts for proprietary interests resulting from certificates of origin for electricity generated in other cogeneration sources Index for session transactions the subject of which are contracts for proprietary interests resulting from certificates of origin for electricity generated in a gas cogeneration unit or in a unit of the total installed capacity of up to 1 MW ts 79

80 GLOSSARY OF TERMS Sectoral terms / abbreviations Abbreviation/term Full name/explanation Abbreviation/term Full name/explanation KMETX Index for session transactions the subject of which are contracts for proprietary interests resulting from certificates of origin for electricity generated in a cogeneration unit fired with methane released and abstracted on pit mining works or with gas obtained from biomass processing in the meaning of Article 2 item 1(2) of the Acton biocomponentsand liquid biofuels SAIDI SAIFI SCR installation System Average Interruption Duration Index - for long and very long interruptions (expressed in minutes/customer) System Average Interruption Frequency Index - for long interruptions in energy supply (expressed in number of interruptions/customer) Installationof the catalytic denitrogenation of flue gases MW e Megawatt of electrical power SO 2 Sulphur dioxide MWh Megawatthour (1 GWh = 1,000 MWh) SPOT market Cash market (spot) MW t Megawatt of heating power Tariff group A Energy sold and deliveredto customers connected to a high-voltage grid NFOŚiGW NationalFund for Environmental Protection and Water Management Tariff group B Energy sold and deliveredto customers connected to a medium-voltage grid NO X ODS Nitric oxides Operator of the Distribution System Tariff group C Energy sold and delivered to customers connected to a low-voltage grid, with the exceptionof end users using electricity for household purposes OTS OZEX_A PMOZE Operator of the Transmission System Index for session transactions the subject of which are contracts for proprietary interests resulting from certificates of origin for energy generated in energy renewable sources whose production period (indicated in the certificate of origin) commenced on 1 March 2009 inclusive. Proprietary interests from certificates of origin for energy from renewable sources of energy Tariff group G TFS TGE (PPE) Energy sold and delivered to end users using electricity for household purposes, regardlessofvoltage of the grid to which they are connected Tradition Financial Services, electricity trading platform designated for concluding various types of transactions, purchase and sale of conventional energy, proprietary interests, renewable energy and allowances for emissions of CO 2 Towarowa Giełda Energii (Polish Power Exchange) Price of baseload (BASE) Price of euro-peak (PEAK) Price of contractwith deliveryof the same volume of energy on each day hour Price of contract with delivery of the same volume of energy in euro-peak (i.e. from 7:00to 22:00on business days) TPA Third Party Access the principle of third party access to the power grid which enables the purchase of electricity and services of its distribution based on separate agreements REMIT Regulation RES Regulation on integrity and transparency of wholesale energy market, specifies the framework of monitoring wholesale energy markets, in order to detect and preventunfair practiceon EU level Energy renewablesources WACC WIBOR Weighted average cost of capital, return on capital invested in distribution activities Warsaw Interbank Offered Rate - interest rate for loans on the Polish interbank market ts 80

81 ISSUE INDEX 1. Operating Summary 2-9 Activities and investments under implementation Asset situation Enea Group in numbers 3 Capital expenditures in Q1-Q Cash 49 Operating Summary 4 Selected consolidated financial data 5 Key operating figures and ratios Comment of the Management Board Key events in Q1-Q Enea Group's organisation and operations Group's structure Changes in the Group s structure Asset restructuring 12 Equity disinvestments 12 Changes in the Group's organisation 12 Equity investments 12 Areas Mining 14 Generation Investments implemented in Q1-Q Investments planned until the end of Status of works on the key investment projects 25 Activities implemented in Q1-Q Activities to be realised until the end of Concluded agreements Financing sources of the investment programme 27 Issue of Enea SA's securities in 2017 Granted and received sureties and guarantees 28 Interest rate risk hedging transactions Agreements of significance to Enea Capital Group operations Transactions with related parties Distribution of cash - subsidiaries bond issue programme Market and regulatory environment Financial position Ratio analysis 50 Financial results - additional information Shares and shareholding Shareholding and share capital structure Prices of Enea SA's shares on WSE 5. Authorities Enea SA's Management Board Enea SA's Supervisory Board List of shares and allotment certificates to shares of Enea SA held by members of the Management and Supervisory Boards Attachments Financial results of Enea Operator Other information Events that may affect future results Corporate social responsibility Financial results of Enea Wytwarzanie Financial results of Enea SA Distribution 18 Enea CG's financial results in Q1-Q and Q Financial results of Enea Elektrownia Połaniec CG Trade Consolidated profit and loss statement Financial results of LW Bogdanka CG Development strategy Results on individual areas of operations Glossary of terms

82 Enea SA 1 Górecka street Poznań gielda@enea.pl